Medicago Inc MDCGF

Is holding shares until the vote riskier than it might appear?

[Nofthe49th]

I’m thinking that holding my shares until the vote on the 27th is not such a good idea. Here’s why.

 

The upside is 1 cent a share if the vote passes; not much of a gain.

 

If the vote is NO what will happen to the share price? I’m thinking it may fall quite a bit in this case.

 

As much as I don’t like what management has done with this transaction and that MDG is worth substantially more in the fullness of time I’m beginning to think that in the aftermath of a no vote there is a risk of a bit of a sell off. 

 

I’m thinking this way because there is no other party interested in paying up for MDG other than Mitsubishi. So holding shares means you expect Mitsubishi will sweeten their offer, when there are no other bidders, or you’re willing to face a possible drop in share price followed by an eventual resumption of an improving share price as the business continues to develop.

 

I can’t see the share price going up immediately in the event of a no vote so the near term upside looks very limited compared to the possible short termdownside after the vote.

 

Thoughts?

 

[Pandora]

I have the same thoughts going on. My broker was very pushy about selling as soon as the offer came out --- so much so that I did not act on it. But now that all this time has passed and there hasn't been even a sniff by anybody else expressing an interest I have the same thought that it will tank if the vote was able to defeat it. The difference is a penny on the share price plus the broker

[rickydee]

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[Pandora]

Well Ricky not being in your "wealth" category I guess we're just trying to be a little more cautious with our pennies. By the way what's your expectation time wise on the ZMS markman hearing news?

[rickydee]

This post has been removed in accordance with Community Policy

[kungfu010]

Any sell-off on a NO vote would create a buying opportunity...

[Lounx]

True, but in this scenario you should still sell at 1.15$ and have cash on hand to buy more share than you currently have if there's a no vote. The only upside of holding on shares is 0.01$ per share (and maybe you will save transaction fees as you won't be the one forcing the transaction, but I'm not sure about that) So overall, it's much riskier to hold on shares at this point.

[Blueocean102]

Just don't forget the obvious tax consequences if you sell outside a registered account...