Theratechnologies Inc T.TH

One good decision TH could make right away

[SPCEO1]

When I was arguing with the CFO on my call a couple of weeks back, implementing a reversesplit to push the share price into double digits was a big part of that. Here are just some of the problems investors face when the stock price is so low:

1.) TH might have a great story but its sub-$5 share price makes it uninvestable for many institutions. They will not even look at it so all the demand for TH shares that might otherwise be present  is wiped out leading to a lower share price, worse financiing outcomes and lower long term value creation for current shareholders. 

2.) Retail brokers face similiar restrictions. They are not allowed to even approach their clients to ask them to buy TH's stock when it is below $5. They have to contort things to show the client requested the purchase of TH rather than they suggested it and they take a risk with their internal compliance staff every time they try to work around these restrictions on buying low priced stocks. Again, potential demand for TH shares is destroyed, the next financiing is therefore done at a sub-optimal price and long term value for current shareholders is destroyed.

3.) Regulators also visit money managers and brokers regularly and inevitable ask for an explanation as to why you own a "penny stock" for your clients. A good explanation can be given but noone really wants to be in that place where you have to answer those questions.

4.) The narrative surrounding a low priced stock starts out in a bad place. A low share price indicates a troubled company to most investors on first glance and they move on without giving the stock the time of day. If I am Paul, I would do a reverse split in a heartbeat just to send a message to staff and investors that this in no penny stock that I am in charge of! TH is much better than that and our stock price will reflect that reality!

The CFO said that if they did a reverse split, the stock price would quickly revert to its origianal price. He has told me this in the past as well and it is really a terrible argument against a reverse split for TH. If he were the CFO of CYDY, I would agree with him, but TH is a real company and that simply would not happen. Say TH did a 5 for 1 reverse split, does anyone really believe the stock price would quickly fall from $12 back to the current level. That would leave the market cap at $46 million, well below the sales of the company. So, the CFO's arguament is foolish on its face and caused me to react accordingly. 

My sense is Paul had no idea what we were even talking about when the people on the call explained to him the problems we face as investors  because the share price is so low. It is not within his sphere of understanding based on his background. But his CFO should know better and give better advice. 

Doing a reverse split would cost some money and perhaps they know the stock will be at $12 soon anyway because of what they have going on in cancer. But it would still send a message that TH is no stinking penny stock and would remove the many problems associated with having a low pricecd stock noted above which can significantly undermine the long term value of the company. It  is an esy step to take, will help create a more positive narrative around the stock and will therefore make the next financing more successful. If so, whatever cost is incurred in doing a reverse split would be quickly recouped.

[palinc2000]

For the first time in years I agree with the CFO...A reverse split would be a disaster at least in the short term...that would be telegraphing the market that they  have no hope of  achieving a SP suitable for institutions or the likes.....Companies have a lot of success with stock splits but I woulkd have a hard time recalling a successful reverse split except maybe those resulting from

[SPCEO1]

Could you provide a logical reason why a reverse stock split would not work? I do not believe the reason you noted already is legitimate, especially if they tie the announcement to good news. They should definitely do a reverse split before they do another equity financing. Reverse splits do have a bad reputation due to them most often being employed by bad companies but extending that historical

[palinc2000]

Reverse splits just dont work....They are done for many reasons ( minimum bid requirements,restructuring ,sweeping the past under the rug in the hope that markets forget ,etc..) Off hand I can only think of one acceptable reason which happens when a company decides to list on a major exchange with a completely new audience and with  soon to be disseminated great news ......Moreover which

[SPCEO1]

Those fundamendantly sound reasons already exist (solid base revenues from the legacy drugs, strong balance sheet with ability to finance future growth from the markets and and a huge upside potential in cancer) but the current low share price is preventing buyers from buying the stock. A reverse split would be additive in TH's case and if you think otherwise, you are just not aware of those

[palinc2000]

Can you provide examples?

[SPCEO1]

I doubt I can access a database of reverse splits but I will look into it. Can you provide a logical reason why TH's share would fall if they opted to do a reverse split?

[LouisW]

The volume is low enough and reverse split could worsen it die to the less shares can be traded. It is no good to me.

[SPCEO1]

It is not the number of shares that trade that matters, it is the dollar amount which should be unaffected by a reverse split.

[realitycheck4u]

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[SPCEO1]

Shake off your tired Canadian thinking. THTX is listed in the US on NASDAQ and the experience you have seen play out in Canada may not be applicable in the US. Particularly given the  circumstances of TH versus those other companies that may have been in desperation mode. And I would urge all of you who have been conditioned to think that way about reverse splits to go back to my original

[Bucknelly21]

Also if you want larger shareholders you have to get rid of the incapable management, including most likely cfo 

[Bucknelly21]

Im actually quite confident he controls the news flow, which should have nothing to do with his job as he really is not good at it, my guess is he hamstrung leah gibson as well 

[realitycheck4u]

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[SPCEO1]

An opportunity that many cannot take advantage of, unfortunately. Thus, a low share price begets a continuing low share price since those who might see it as an opportunity cannot act on it. That is just the facts and to argue against those facts does not make any sense.

[Bucknelly21]

Even if we get good results management will figure out a way to mess that up too im sure, i just dont think they are any good, they cant sell, market, or do good deals... what else is there lol ?

[Bucknelly21]

Thera's idea of making themselves know is paul re posting something Philippe posted on linkden and getting 3 likes, its pathetic 

[ANALIAS00]

For the same wrong reasons SP increase when a good cie proceed with a split ? THTX have a bad reputation or is seen as a bad cie. More sellers than buyers. So investors behavior may have a negative impact on the SP after a reverse split. But of course a split or a reverse split should not change anything. But it does :o)

[SPCEO1]

Indeed it does! It increases the chances that institutions will buy the stock and reduces the chances current large holders will sell the stock because of compliance and regulatory pressures we face to do so.  But it is ridiculous that stock rise when a split is announced and this most often happens when poorly informed retail investors are heavily involved in the stock or the market

[realitycheck4u]

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[SPCEO1]

You simply are not thinking this through. I can buy shares but I take regulatory and compliance risk if I do. That limits the buying I might otherwise do. But I am not the issue. It is all those other instutituional and retail broker potential buyers who never even bother looking at TH because of compliance and regulatory issues. THcan have a great story but no buyers are showingup because the

[realitycheck4u]

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[SPCEO1]

You may need to change your name as you are not dealing with reality if you think we should somehow be able to influence the regulators and exchanges. You are right that a share's price should not matter much but because of the very real compliance/regulatory constraints I have noted, the share price actually matters a lotwhen it is too low.

[Momo25]

I have seen a reverse split that allowed shorters to take advantage of it. A weak company is like a wounded animal, every predator smells the blood at a given distance. A 5 for 1 reverse split will make a share around 15. In 6 months it will back to 3 dollars. This kind of reasoning is like a voice resonating in an empty church.

[PWIB123]

You all actually believe this don't you?  There are examples for every scenario, because the context around the decision matters more than the decision itself.  You could argue that dilution is always bad and that stock prices always drop when a stock dilutes shareholders.  That's not true, but repricing shares usually comes at a discount and the stock suffers temporarily

[canadapiet]

"strong balance sheet with ability to finance future growth"......??????????????????? Are you joking or talking about another company????? SPCEO1-(3/28/2022 6:12:27 PM) RE:RE:RE:RE:One good decision TH could make right away Those fundamendantly sound reasons already exist (solid base revenues from the legacy drugs, strong balance sheet with ability to finance future

[Momo25]

SPECEO isspecial. His posts are very oriented, and often misleading . They are interesting to read however. When he announces some good news in perspective try to sell a part of your shares if you can.

[FredTheVoice]

MOMO, the guy is just the undercover IR of thera, no ? FTV.

[SPCEO1]

It appears you have not been reading all my posts! You get the good, the bad and the ugly from me as is abundantly clear from what I have written. Do you really think that TH instructed me to give them all those "F's" when I was handing out weekly grades for their weak interaction with investors? You are smarter than to say something that obviously incorrect.

[SPCEO1]

I am not sure how special I am but maybe you are right that I am "oriented".???

[SPCEO1]

In the scenario where the convert does not convert, TH should be able to easily refinance it. As of the most recent report TH has net debt of around $18 million, a small amount, and will likely be able to raise meaningful amounts of cash from partnerships in cancer. The company has also spoken new about debt financing as an option they would consider. You can't do that if you have a weak