Replies to post #26722 on Anavex Life Sciences Corp (AVXL)

[scottsmith]

Yes. Missling is no fool. Eom

[blu_1]

LPC accused of illegal shorting here http://www.ripoffreport.com/reports/specific_search/lincoln%20park%20capital

[Canoepaddler]

So you are quoting some random tweeter (no doubt a short) with 36 followers. Let's keep this kind of trash off this board please, as it disrupts healthy discussion. Thanks

[JB3729]

You might be interested in what death spiral financing is. Also, how about sending the link to the author of the tweet so he learns what it is -

https://en.wikipedia.org/wiki/Death_spiral_financing

Death spiral financing is a process where convertible financing used to fund primarily small cap companies can be used against it in the marketplace to cause the company’s stock to fall dramatically and can lead to the company’s ultimate downfall.

Many small companies rely on selling convertible debt to large private investors (see Private investment in public equity) to fund their operations and growth. This convertible debt, often convertible preferred stock or convertible debentures, can be converted to the common stock of the issuing company often at steep discounts to the market value of the common stock. Under the typical “death spiral” scenario the holder of the convertible debt initially shorts the issuer’s common stock which often causes the stock price to decline at which time the debt holder converts some of the convertible debt to common shares with which he then covers his short position. The debt holder continues to sell short and cover with converted stock which along with selling by other shareholders alarmed by the falling price continually weakens the share price making the shares unattractive to new investors and can severely limit the company’s ability to obtain new financing if the need arises.

An important characteristic of this kind of convertible debt is that it often carries conditions like a quarterly or semi-annual reset of the conversion price to keep the conversion price more or less close to the actual stock price. But a lower conversion price also increases the number of shares that a bond holder gets in exchange for one bond, increasing the dilution of existing shareholders. A lower price reset can also force investors that have set up a long CB/short stock position to sell more stock ("adjust the delta"), creating a vicious circle, hence the nickname death spiral.

The companies that are willing to agree to financing on these terms are often desperate and could not obtain funding through any other means. The terms, though viewed by some as onerous, give the lender a potential way to recover their debt regardless of what happens to the shares of the company. The lender would have a potentially greater gain if the shares were to increase in value but if they do decrease in value, there is some protection. If this were not the case they would probably not be willing to lend the money given the poor risk profiles of the companies interested in this type of financing.

[ClosetInvestor]

Read the financial agreement from the 8K. AVXL paid for this agreement and controls the financing 100%. LPC may not be the most respected company but AVXL has a guaranteed $50 million from them with little risk. Stop following people with certificates in financing from the YMB and look at the facts.

[stealthways]

You keep posting stuff with topics that relate to that kid amateur writer David Ward ....he writes a lot about death spiral financing and other things you recently brought up .....Anyways AVXL is the "exact opposite" of that FYI...Go study AEZS if you want to know an example of death spiral ...it is when the there is a bunch of warrants issued that can be exercised on a "cashless" basis at prices always below previous market prices --- so the exercise price keeps droping .... and this opens the door for them to short the stock as well (BTW the AVXL financing has no warrants so totally wrong) ... are you sure you are not the kid writer as you talk his talk...which is drivel..

[Rubyred77]

Either you believe the science or you are looking for false reasons to get rid of your shares. You should sit back and turn your pc off for a couple weeks. Don't let them take your shares that cheap