Replies to post #87929 on Biotech Values

[mcbio]

Re: CYCC preferred shares

The preferred shares are very illiquid with a big spread and even if cycc does pull in some money there's no assurance they won't choose to just continue accruing, i.e. not paying the dividend.

That's an excellent point. They don't have to pay out any funds to preferred shareholders right away and likely would just keep accruing given their funding needs for the Phase 3 trials. Also, $1.2 million annually is not a particularly burdensome amount, so they could just keep accruing it.

I assume the biggest reason to buy the preferreds would be for the $10 per share liquidation value. In the event of a buyout, preferred shareholders would then be due their $10 per share (about $20 million total given about 2 million preferred shares remaining), so perhaps that is the biggest draw for the preferred shares, not the accrued dividends.