INO stock has gotten as far as $3.95/share. It backed off a bit and then the Company had announced an exercise of a previously announced public offering. The offering is at $2.90/share, a total of 19M shares plus a few more if the offer is over-subscribed. The offering is expected to bring in $55M minus the costs of selling and discount.
Several question spring to mind:
1. Why 2.90? If the results from the current study are good, why not ask for 3.50? Sure, it would signal that the Company believes the results are good.
2. Does the $2.90 mean that the results are iffy? Not necessarily.
3. Is this dilution necessary? The stated reasons for the offering are general corporate purposes and operating costs (believable), starting new studies (believable) or corporate acquisitions (not believable). The fact that this offering was previously announced indicates that it is not suddenly thought up to dampen speculation in the stock. The strike price seems a bit low and the stock is trading above that. The public does not believe that the stock will head much further South - at least not in the near future.
We have to wait for the results. The question remains whether the treatment gooses up the T cells. I suppose that the 'further studies' will tell us what the experts think of the results of the current study. If there is a decent T cell increase in the current study, it would make sense to start other studies where T cell response is crucial. If the T cell response is so so, then the 'further studies' will aim at studying an immune response.
Can't speculate any further than that.
Thursday, February 27, 2014
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