Well I kind of have to agree....Nick and his crew showed their competency in how they missed doing a minor filing on the original convertible financing which led to a complete debacle and forced them to repay the funds immediately and negotiate another package with interest rates jumping from 1.25% due in 2026 with a convertible price in the mid $20's, to 7% with a convertible price reduced to $9.89. So the minimum extra financing cost is approx $10 mil per year for 2024, 2025 and part of 2026....so lets say $25 to $30 million anyway. Also, when and if these shares are converted, this will result in much more dilution than the previous convertible and will certainly result in a much lower share price at that time.
Now all of the above does not mean that Avid will never succeed, nor that we(Avid) will ever trade back into the teens but this will certainly be a drag on the share price going forward as compared to the original convertible debt deal.
Now I still believe that Avid will yet succeed and think we have a shot at $15+in about 18 months or so, which is very good......but nothing close to where we would have traded. The bottom line remains that for Avid to make money and hence for the share price to go higher, they MUST start making progress on filling their capacity....even under the original convertible....sure their financing costs would have been lower, but making solid profits still would only come if they manage/d to fill capacity....and like I have said before....I think actual capacity is higher than $400 mil, or rather they have ways of increasing this.
So yes we may still have very good times ahead.....now as for the question of who was the better CEO?....only time will tell....remember that it was SK who saved the manufacturing side of Peregrine which allowed the share price to run when new management was brought in and allowed shareholders to cash in. I also do not believe that SK would have missed reading the original convertible financing terms that required minor filings and would have seen this package through to completion.
Now would SK have embarked on the huge expansion that Nick pushed through????? Who knows? And if Nick manages to fill up capacity in a timely manner, we will all sing his praises no doubt. With rates starting to come off or predicting to start to come off, this will open the doors to new financing for a lot of smaller Biotechs leading to more drug candidates and more contracts for Avid....high profit contracts!
So we will see as we are now in the hands of Nick G.....if he fails to meaningfully start filling up capacity, he will be gone and the company will probably be sold.
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