GREY:INNHF - Post by User
Post by
vectorcanon May 28, 2011 10:07pm
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Post# 18640444
Financing drag on stock - it'll trade in $.50-$70
Financing drag on stock - it'll trade in $.50-$70
See the pumpers are all out saying how undervalued this stock is. The fact is it is likely fairly valued in the $.80 area. What the pumpers here aren't telling you is there are nearly 20MM very cheap shares from the financing that come trading in a few weeks. The financing was priced at $.30 cents with $.50 warrants. There will be an avalanche of paper coming free trading when the financing comes off restriction.
A second drag on the stock will be above $.70. If the shares trade above $.70 for 10 consecutive days, an accelerated warrant clause kicks in, which will create a second avalanche of selling as there are nearly 10 million warrants priced at $50.
I can understand the reasons for management wanting to cash up but the size of the $.30 cent financing was far too big. Really bad decision but hindsight..... Should have raised $2MM rather than $5 at $.30. Bids in the low forties should get hit.