Replies to post #433975 on Elite Pharmaceuticals Inc (ELTP)

[Maxthedog]

Elite Pharmaceuticals to Receive up to 40 Million from Lincoln Park Capital Fund
ACCESS Newswire
April 15, 2014


Elite Pharmaceuticals Inc. (OTCBB:ELTP - News) announced Apr. 14 that it has entered into a common stock purchase agreement with Lincoln Park Capital Fund LLC ("LPC"), a Chicago-based institutional investor for up to $40 million.

Proceeds from the transaction will be used to develop the company's pipeline of products, including the abuse resistant opioids, and for general corporate purposes.

[namtae]

Slight correction in the order of events

when Hakim wanted cash he would have to notify LPC in advance and then sell shares at a discount. LPC would immediately sell those shares on the open market, causing both dilution and constant downward pressure on share price

Elite would first make a request to LPC for capital.

LPC would then short ELTP shares for the amount of capital requested, attempting to drive the share price down.

Then at that new lowered share price, LPC would buy back the shares from Elite they shorted at a discount to the then already depressed share price yielding greater profits and dilution

Thats the general formula for those "institutions" in this line of business