Wow, under a dime. Some thoughts about this. SWHN was a shell reverse merger. They did a first PIPE about 16 months ago to raise money to fund their R&D (much of which was complete, as some was a spin-off from university research and some was exclusive rights to commercialise an existing German technology).
If memory serves, the PIPE terms were get your money back + 9%, after 24 months, or get shares on the company and once unrestricted you can trade them freely. However, I believe there was a 24-month restriction on those shares -- that is.. 24 months from the PIPE closing (which was Dec 2009). If that's the case, then sellers here for the past few months aren't the PIPE holders. Furthermore, the strike-price of the PIPE was $0.50 (again, if memory serves), and so when they become unrestricted in Dec this year, clearly investors will opt for the 9% yield, and not stock.
But can SWHN pay it? Only if they raise more funds!? Like a pyramid scheme in a way. Don't get me wrong.. I'm not suggesting SWHN is anything less than 100% legit -- I know they are legit. I'm simply trying to understand the selling, which at first glance appears to be simply a lack of confidence in the revenue-stream actually materializing. But if the sellers are pre-RM, then even at a dime, they are selling at a profit.
What would make people sit up and take notice would be insider buying. At $0.10/share, you'd imagine there should be a whole lot of that. Pitty there ain't. Pitty, too, that the company has not updated its shareholder's for a while, nor explained (satisfactorily) the delays to secure purchases.
Wait and see, I guess.
Tykün
AI
