Replies to post #597582 on NorthWest Biotherapeutics Inc (NWBO)

[hankmanhub]

I also thought that was the case. However one thing still bothers me about this understanding. Why then, on the eve of a big deal that will add multiples to a stock's value, can not the ceo of the firm sign an NDA with his best friend, and sell him a large bundle of newly minted shares and make him very rich. He is not gaining unfairly against any particular shareholder, but it still seems unfair to all the current shareholders as a class who are being denied the same opportunity to cash in or being unfairly diluted.

[FeMike]

The principle is that parties to any trade on the market should be on a level playing field wrt inside knowledge. Some people might feel that it's not fair that anybody may be given any info to induce them to buy an offering or any kind of acquisition or partnership involving buying shares from the company, but that doesn't break the fairness of the trading on the open market and is allowed, again only wrt a deal between the company and a buyer of shares directly from the company.

Could you give more background on this?

I get your argument that the two parties (company and insider) are on a level playing field. But the company has an understood obligation of trust to any of its shareholders, and to issue shares to an investor in possession of MNPI at market value (or especially at a discount to market) is a breach of that trust and is by no means "fair". And that element of trust is indeed covered under Securities law. And the shareholders are cheated in this scenario with unfair dilution caused by a transaction between two parties privy to nonpublic information.

I'm sorry, I just don't see how this type of transaction would be legal.

[attilathehunt]

The smart thing to do, for a potential buyer, is to purchase 4.94% of O/S stock before signing NDA and then take a position under the NDA.

[skitahoe]

Kabunushi, what you say about people buying directly from the company with NDA's makes sense, but I"ve also got to believe that there would be some time limit as to how long before they're free to buy, or sell on the open market. Is that true, and if so, do you know how long that time may be.

I believe that people who'd like us to believe that the company is nearly broke fail to recognize the options that are outstanding. As I understand these options, the cash they potentially can bring in doesn't vary, what does vary is whether the holder chooses to purchase all the shares, at the agreed upon price of the option, or if they choose to take the so called cashless option where they use shares at the current price to pay for the remainder of the options, thus some of the optioned shares are returned to the company.

The higher the share price the greater the likelihood option holders will choose to purchase all shares, but regardless, I believe the company knows that they can tap into what's held in options at any time they wish. I also believe they have a close relationship to the holders of the options and if they need the cash, most holders would agree not to take the cashless option. Of course I could be wrong about this, I'm interested in hearing others thoughts.

I believe that somewhere between 200 and 300 million shares are subject to such option, and that the average price the holders will pay for them is somewhere between $.30 and $.50. If this is correct it can be seen that the company could pull in something in the $100 million range, or more. It's really not a fortune with the way money is spent, but they're not exactly paupers either. I think LP has us well positioned to move through approvals and after that the share price should permit much smaller offering to generate far greater cash than for many years in the recent past.

Gary