Seelos Therapeutics Inc (SEELQ)

[Dimitrios George]

Cartonet, several of us have pointed out the mechanics of the offer. Lazard purchased all 6M units at $2.679 per unit (one share and one warrant):
http://www.sec.gov/Archives/edgar/data/1017491/000119312513235744/d544310d8k.htm

OK, think this through with me.

The price immediately sank to below the $2.85, the original public offer price. So Lazard was stuck with 6M units...less the 35K that Pascoe bought and the 20K that Martin bought. Lazard is not in the business of holding a ton of shares that it was a broker for. The shares and warrants were immediately separable. It made more sense for Lazard to sell the shares at a loss and keep the warrants. The warrants that Lazard demanded be a part of the offer were a safety valve for Lazard in case the price dropped.

Hedge funds knew all of that.

Why should hedge funds (or other institutions) step in and jack up the price when they can sit back and suck up the cheap shares that Lazard is unloading, both to hold and also to eventually cover short positions? On Lazard's part they made commission money and they are keeping the warrants. But I am sure that Lazard is less than happy that they were not able to realize profits from EU approval that they KNEW was in the bag. You win some and you lose some. The warrants (Lazard's safety valve) will eventually make them a handsome profit. We will find out on or around August 15 (45 days after the June 30 end of the quarter) if Lazard kept any shares and what institutions stepped in to buy.

I am sure that Lazard is taking some private ribbing (or getting thanks) from their hedge fund buddies.

But we retail shareholders feel the fallout from the above. The fallout, as value points out, will be temporary. Be patient.

I think EM is right about Pascoe and Somaxon. It was a product thing. Apricus has waaaay better products.