I agree with your recent blog post that the fireworks will all go off in one day (or week) to catapult the share price. Yet, in your opinion, why hasn't the share price reflected anticipation? Perhaps the fear of dilution?The above is from a reader with whom I regularly and very enjoyably e-mail back-and-forth about all things Provectus.
There is market confusion regarding the PVCTP "IPO." The company is in control of the process by which terms are set; that is, management is negotiating with the prospective lead investor(s). Of three potential investing entities (two strategics, one financial), one or two of them would lead or co-lead the round and account for about of half of its proceeds.
Maxim, in order to gauge whether there are 300 or so fellow round lot holders to follow the lead investor(s), is circulating "not established" deal terms of a potential "IPO" that are (a) very attractive for prospective investors subscribing for it and (b) very unattractive for existing shareholders and prospective pre-"IPO" buyers of the common stock.
Specifically, the "at market" conversion ratio -- the purported $4 per share PVCTP offering price divided by the PVCT.OB share price when the "IPO" closes, which at today's closing price of $0.67 would yield a conversion ratio of 6 -- and warrant coverage -- at least 40-50% to perhaps as high as 100% -- indicate drastic dilution of about 25-30%. I do not think nor do I believe management would allow existing shareholders, particularly long-time and very long-time supporters, to incur such pain. Market uncertainty, however, is being created.
As a result, some existing shareholders may be selling some or all of their share ownership and/or refraining from buying more shares. This group believes it sees likely dilution ahead. There may be other contributors to selling in September, too. Prospective new investors may be refraining from buying more shares because of the dilution they too believe will result from the PVCT "IPO."
There also is, more broadly, a continued "show me" attitude with prospective investors who are not confused by nor care about the PVCTP "IPO" and a dilution bogeyman: Show me the SPA. Show me the final MM Phase 2 trial data. Show me more Moffitt data. Show me more about the Pfizer interest. Show me. Show me. Show me.
Yes, kalkoen-man, the SPA did not show up this week. I admit, pabo-tao, that Q3 effectively ended today. You may commence the grief giving indioilar-man.
In all seriousness, however, I am focused on the outcomes of next week following ESMO 2012. As arguably the biggest event in the company's history, I expect management to use the venue as a platform for Provectus and PV-10. What is more critical to the common stock is not the nervous nellies, nor is it sharp investors looking for a good deal. Rather, it is the Missourians in the crowd who, upon reading the SPA PR, the ESMO PR(s), the Moffitt PRs, etc., come off the sidelines and buy, buy, buy.
Let us circle up towards the end of next week and take stock.