It all comes down to the reason behind a R/S. In general:
1. A R/S is "bad" when done to raise a fallen sp so that a stock continues to maintain the price listing requirements for it's given market. Generally, longs jump ship knowing it's not a healthy company sign, and shorts flock knowing the price will fall. As an aside, the biggest abuser who has gotten away with this for years is the amazing CTIC w/Bianco as CEO. Amazing--does R/S's on a regular basis, then dilutes afterwards, and pockets the money...I, like many, many, have lost on a stupid play on that company...luckily in my case, not much. But that guy has bilked millions, and people still come back for more.
2. A R/S is good when done because an undervalued company does so in order to a) uplist to a better market (ex: OTC to Naz) and b)in order to obtain a price (usually over 5/sh) that allows institutional investment houses to invest, as many have rules against buying under a certain amount or on the OTC. It is not done because a company is "in trouble." I have seen this a few times--usually a dip follows as longs still get nervous, and some might not like say a 20:1 R/S, where a million shares suddenly becomes 50k, even though the value is the same, and shorts jump on for the dip action. For good companies, the dip is usually fast lived, value returns, and the company thrives.
Nasrat has seemed to indicate that he strongly does not want a R/S, and once approval, maybe not necessary. But, yes, he has kept that option open. He would be a fool not to leave every possible strategic route available to him on the table, and gaining institutional interest (some may buy some just to put in a Biotech diversified "basket"). If it came to a R/S making the best strategic sense at the time, it's far better he did keep it open as an option than to do so, and lose credibility, by "going back on his word."
That said, given their current financial strength, and progress on ELI-200 and other research (and generics), as Nasrat stated, it is not something we are looking at in the immediate future. IMO, the sp following an FDA decision, and short of any buyout offers, as he gets an idea of how much appreciation is taking place in the o/s, then an R/S may be considered, but we are a long way away. Good for board chat, but not happening anytime soon.
JMHO,
Maz
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