Replies to post #37980 on Cytodyn Inc (CYDY)

[BlackDoggie]

Yeah, I think that the key may be recognizing what counts as an accredited investor and comparing that to the minimum Paulson investments required. To be an accredited investor:

1) Be worth over $1mm, excluding primary residence, or:

2) Make over $250k for the last three years.

Neither of those necessarily and definitively put you in a place where a minimum investment of $50k in an OTC stock is a comfortable or easy thing to carry. However, if you can put in $50k, take out $52k, and keep warrants? That becomes very doable. I would guess that regardless if potential outcomes, the vast majority of individual accredited investors simply don’t want to carry $50k+ of exposure to an OTC stock if they can keep warrant exposure for free. Simply too large a portion of liquid net worth.

I’m with BL and finesand on this one. And if Paulson + OTC doesn’t fully explain the SP, I bet it explains 95% of it.

[d0lphint0m]

Think about it. If you did first offering minimum investment of $50,000 (100k shares) and 100k warrants, sold the shares at .55 and on next offering bought $55,000 (110k shares, 110k warrants) sold the shares at .55 and kept the warrants....etc. you see how at the end of 10 rounds you would be up to $130,000 or 260k shares and holding 1.6 million warrants.
The offering has changed to 1 warrant for each 2 shares at .30 but one can see that this has been a very profitable strategy.
My numbers may be askew as the 1st offerings were probably at higher prices but the last few have been at .50.

[Bulldog88]

The fact of the matter is... they take all of the risk off the table no matter how promising the particular investment might be. If i was in that game I’d play it exactly the same way. They still have a ton of up side with those warrants.