RE:Why the Majority Will Vote Yes Why the Majority Will Vote Yes
If that is the case why not stop there? I guess that is the reason they hold elections and why when companies propose changes such as splitting into two new companies it requires a 2/3rds majority not a simple majority.
The split is by far the best value generator that has come along for Nuvo in some time and has been and will continue to be reflected in a higher share price.
Everyone I know invested in this company because of Pennsaid. That is the only value generator - it is where the revenues come from and what will drive the company forward.
Voting no will cut the share price down and we will languish there for years to come.
Proposterous. There is absolutely no basis for such a ridiculous statement. With $50 million in the bank and growing revenues Nuvo will be profitable in 2016 all other things being equal.
If you disagree with them you are in management's pocket and taunted. God forbid that people should have differing views and a debate. Not permitted in the no camp. No sir!
I thought that we were having a debate right here and right now. You have made some points and I am responding.
The institutional investors, professional advisors, and analysts all strongly support the split as a value generator. The no group of non-professional, faceless and nameless shareholders disagree, mainly because they are mad at management compensation.
April 16th 2015 the compay issued a PR that they were spinning off WF10 and that the remain of the assets would stay with Nuvo. Further the R & D group expenses would be curtailed beyond 2015 and would be limited to projects for which partners fund clinical trials. This startegy was based on "examining alternative strategic alternatives with the assistance of outside consultants". Less than 5 months later the new and improved strategy was to split off R & D and make it a focal point for a new company. Maybe we should wait another 5 months to see if it changes again but it sure looks like the sole purpose by management is to create two companies from one. Please forgive me if I have doubts after such a significant turnaround.
They also have said a dividend is possible. Nuvo has also said no to that (mainly since it would be ridiculously imprudent in the current environment where cash is difficult to borrow).
Management has multiple ways to use retained earnings. What shareholders are telling management by voting no is that based on the limited information provided this is not a prudent investment. To invest 70% of your money in a highly speculative biotech start-up is something no broker would ever advise a retail investor; why would Nuvo do it?
They speculate that Horizon will make a bid for Nuvo. No facts to support it but if true, the bid would be much easier with a yes vote and a split.
We have heard the argument by yes voters suggesting that a takeover would be a lot easier if the company splits. By moving the cash to Crescita it somehow saves it from a takeover. The simple answer is that cash is cash and easily valued in a takeover. Clearly if someone wanted the Pennsaid assets they would buy Nuvo for them. Meanwhile any severance and executive compensation would be paid for by the takeover company and not Nuvo shareholders.
They indicate that additional DSUs and SARS will be granted and if you vote no you will save $6million (part of the $44million mentioned above). Untrue again. These DSUs and SARs have already been granted.
The estimate is between $3 and $6 million would be saved in shares and or cash and the final number determined by the share price just before the split. There are existing Nuvo SARS units and after the proposed split there will be Nuvo Pharma and Crescita SARS units. That is what they say on page 17 of the circular.
You didn't mention the $79.22 million in tax losses that will follow Crescita. As Pennsaid sales increase those losses could potential shelter income and will do little good for the foreseeable future with Crescita.
Voting No doesn't mean forever - just not now with the information presented.