Kelt,
I always appreciate your comments and I agree with your example of a buyout. However, the issue for me is not the mathematics of Market Cap and the actual value of the company based on a buyout amount.
My issue is the perceived value of owning the stock and the speculation that occurs causing PPS to increase.
As I recall with the dotcom bust, there were companies with PPS in the hundreds with no revenue and no signs of revenue in the near term. They were the 'hot' stocks. In retrospect those companies were not worth the value of the stock price.
CTIX is a company with multiple biotech trials in progress. What happens if the trials continue successfully? My belief is at some point circumstances will occur (BP partnership, FDA approval, etc) which will allow movement to the Nasdaq without reverse split.
Once on the Nasdaq my guess is the PPS will increase based on speculation around the value of owning the stock. It will become a stock that rises with some semblance of reasoning (i.e. revenue potential) but more significantly due to its "hotness".
It is at this point, I will be extremely happy that a r/s did not happen (no matter what the mathematics of a buyout is).
Of course all this is predicated on the continued success of the science.
Anyway, my two cents...
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