RE:RE:800,000 shs on the ask
This is somewhat true. An investor could oversubscribe say 3x there initial investment and double there original investment. They would have to leverage 4x their original investment to do this, which is very risky unless the company is nearly gaurenteed to bounce back, such as in RGX's situation. However since RGX is positioned to bounce back, most long-term shareholders would look at this as somewhat crazy. The price had slowly dove from ~$0.10 to $0.05 before if was clear they needed to do another RO, at which point it drove price to $0.01.
So theoretically with cash back in the bank and still on track to start producing, the market value should trend back towards $0.05 - $0.10 range, however if people used LOC it makes sense they would need to sell cheaper to repay the loan.
-----GPTs Explanation-----
Let's compare the two scenarios: one where an investor exercises 100,000 rights and another where an investor oversubscribes and buys an additional 300,000 rights.
Scenario 1: Exercising 100,000 Rights
- Initial Investment: 100,000 shares at $0.01 per share.
- Initial investment: $1,000.
- Exercising Rights: Buy 100,000 additional shares at $0.0075 per share.
- Additional investment: 100,000 shares * $0.0075 = $750.
- Total Shares Pre-Consolidation: 200,000 shares.
- Total investment: $1,000 + $750 = $1,750.
- Post-Consolidation: The 2:1 consolidation reduces the shares to 100,000 shares.
- Selling Price: The stock price rises to $0.02 per share.
- Value of shares post-consolidation: 100,000 shares * $0.02 = $2,000.
- Net Gain:
- Selling value: $2,000
- Total investment: $1,750
- Net gain: $2,000 - $1,750 = $250
Scenario 2: Oversubscribing and Buying an Additional 300,000 Rights
- Initial Investment: 100,000 shares at $0.01 per share.
- Initial investment: $1,000.
- Exercising Rights: Buy 100,000 additional shares at $0.0075 per share.
- Additional investment: 100,000 shares * $0.0075 = $750.
- Oversubscribing: Buy 300,000 additional shares at $0.0075 per share.
- Additional investment: 300,000 shares * $0.0075 = $2,250.
- Total Shares Pre-Consolidation: 500,000 shares.
- Total investment: $1,000 + $750 + $2,250 = $4,000.
- Post-Consolidation: The 2:1 consolidation reduces the shares to 250,000 shares.
- Selling Price: The stock price rises to $0.02 per share.
- Value of shares post-consolidation: 250,000 shares * $0.02 = $5,000.
- Net Gain:
- Selling value: $5,000
- Total investment: $4,000
- Net gain: $5,000 - $4,000 = $1,000
Comparison
- Investor Exercising 100,000 Rights:
- Investor Oversubscribing and Buying 300,000 Rights:
By oversubscribing and buying an additional 300,000 rights, the investor ends up with a net gain of $1,000, which is significantly higher than the net gain of $250 for the investor who only exercised 100,000 rights.