RE:Good old fashioned warrantsOverseas it's very typical to have "rights" issues -- selling the right to buy shares at slightly below market, as a means to raise capital. They are issued proportionately to all shareholders and you can keep yours and exercise them or you can sell them on, take a bit of cash, and someone who wants more exposure can buy them. It's required in some overseas markets.
The problem is as SPCEO says, they're usually quite short term (meaning weeks/months). Then you have the risk of whether the exercise is above or below when you need the money. Lastly, if you do it in the US, it's perceived you are a troubled company that can't raise money normally and it's to "rescue" you from some terrible fate. So no one does it unless you are desperate and possibly think you'll hit the wall. THTX isnt' remotely in that condition with it's balance sheet or prospects.
You could do the straight warrants, but all shareholders can ultimately keep themselves from being diluted by buying their proportion of whatever offer is being done. I didnt' buy in the ONO, but if you did, you weren't diluted at all if you bought your slug. But all these require you to pony up more money and unless we see milestones hit, many shareholders will hold back. But it's a creative idea.
Scioto1 wrote:
Have a question for our esteemed brain trust. An instrument used, fairly regularly, when I 1st started investing is stock warrants. What does the brain trust think about advancing the idea of thtx issuing warrants that would be listed on the market to existing stock holders, at a reasonable strike price as opposed to private solicitations or shelf offering? This would allow those who've been invested for a while to either take advantage of the warrants to buy more or sell them on the market -- a way to reward long term investors and raise money at the desired price. Thoughts?