Another Staged Press Release?Here is question that rjc2827 raised in his post. Why was the warrant release made after the market closed yesterday and Brad speaking in NY before the markets today? As I typed this post, I was expecting Oncolytics to make another release at 7:30 this morning announcing a new trial or a new partner. I do not see it as I go to post. Oncolytics’ balance sheet does not require an emergency infusion of cash. The $7.7 million is being added to a $50 million war chest to bring Reolysin home.
Thanks rjc2827 for pointing out that that there was 1 year and 8 months remaining on the warrants. CFOs manage a company’s cash flow without a heart. Their incentives are to maximize the company’s return. They do not do “favours.” I agree that they exercised their warrants to fund a new pivotal trial and the institution has an interest in it. The institution could be the Big Pharma directly or an investment firm fronting for them to keep their identity a secret.
I have pasted rjc2827’s last post below since OrdinaryAverageGuy (A-O) does not want it at appearing at the top of the Board. A-O is participates in a buy side manipulation where institutional investors mask the value of Oncolytics and Reolysin to acquire shares from existing retail investors. We are fast approaching a spike in the stock that should exceed 400%. RBC Capital Market analysts’ modeled $26.52 in 2016. Existing retail investors hold onto your shares. Enjoy the benefit of your foresight. Holding onto your shares hurts them. The low volumes yesterday, 45,343 for ONCY and 38,227 for ONC, indicate retail investors are not interested in selling. A-O is warning retail investors against buying on margin because the pressure it will put on the stock price. A 400% increase in Oncolytics is insight. Calculate the percentage that your investment in Oncolytics represents of your overall portfolio. Multiple the result by 400% to get an estimate of what Oncolytics will add to your total portfolio return. Do you take advantage of the pending opportunity by increasing your holdings? I have also pasted A-O nonsensical reply to bury posts.
RJC2827’s Post
Wow! These warrants still had about another 1 year and 8 months (or so) to run before they had to be exercised or lost. This might be a big favor to Oncolytics by their biggest institutional shareholder, but it's more likely that they made this early payment to Oncolytics simply to benefit themselves. After all, they are a significant part of this company, and what helps Oncolytics, helps them.
Now, what help does this offer? According to the PR, The Corporation plans to use the proceeds to fund an additional randomized clinical trial. Ok, that’s what is being done. Perhaps the question should be “What’s the effect?”.
The effect could be that they wish to put Oncolytics in a position where Oncolytics can either get a better partnering deal, can get an earlier (acceptable) buy-out deal, or perhaps put Oncolytics in a position where they will b able to leverage the information that the new Trial will bring to allow Oncolytics to “go it alone”.
The warrant holder is voluntarily paying Oncolytics $7.7 million early. For whatever reason, they have decided that they would prefer to pass the money through to Oncolytics now, rather than later.
$7.7 million could be large enough to finance an additional Phase III Trial.
Perhaps we’ll learn more on this in Brad’s presentation tomorrow morning (Wed Mar 2, 2011) at the RBC seminar that will be webcast starting a half hour before market open tomorrow. Webcast Link: https://www.wsw.com/webcast/rbc129/register.aspx?conf=rbc129&page=rbc129.panel1&url=http%3A//www.wsw.com/webcast/rbc129/rbc129.panel1/
A-O’s Nonsense
Reader beware: JLGemini has bought ONConmargin. His/her margin call is coming due, and he/she probablycan'tcover it. He/she is now trying to pump ONC in the short term inanattempt to cover his/her position. Should the pricespike to his/hersell price, he/she will then short ONC to make money on it's post-spikedip and trash it repeatedlyand ruthlessly. In the short- and long-terms,this leads to volatilityin stocks such as ONC and usually lower valuefor long-termshareholders.