Comments on P.P.I'm looking for input from more experienced investors as to the potential outcome of this PP announced today. First I will offer my outlook:
It's difficult to say what will happen with FAS before this is complete but I would have to agree that 0.60 cents is the lowest level we'll see. Otherwise who would buy the shares, right? I assume the market will be manipulated to maintain the daily price slightly above this level to encourage new buyers.
However, am not sure as to whether or not any NRs can be released during the financing period. In the case of ADX this was not allowed where as with RBP's PP there were encouraging NRs that boosted the share price. That being said, with no news we can expect the .60-.70 range for some time (IMHO). Someone care to expand on this?
I have seen some stocks, after their private placements have been completed, soar like an eagle (KCA) and some hover around the PP price (ADX) for at least several weeks. I have yet to see any fall below the PP price but ADX is pushing it with a lack of news releases and RBP is heading south towards that level.
It also suprises me based on comparison of other PPs how close to the current price that the PP was offered. For example, ADX was trading @ $4.90 and the PP was offered at approx $3.16. RBP's PP was for 0.30 cents/share when it was trading over $1.00. I would assume that FAS would complete their financing quicker and with more interest if they would have offered double the shares at half the price. Fortunately they didn't as that would have weakened our share's value even more.
I know that the recent downturn of this stock can be attributed mainly to the biotech sector's troubles and the lack of NRs by FAS(although positive NRs haven't helped IMM at all recently). In fact, the entire market is suffering. I can only hope that this stops the bleeding like I think it will and trigger an upswing at some time. I assume this is becoming more and more of a long term hold in light of this.
However, I remain LONG ON FAS.