RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Merck buys Velosbio
Quote:"How is " the concentrated ownership of the stock represented on this board" a problem? We're all long term investors which makes less shares available to trade so if there was a demand for the stock it would run."
This type of argument is typically come from some institutions (WS in particular). It always happens for small, but potential biotech/starup companies.
Since shares are concentrated on retails' hands, institutions would not be able to accumulate without raising price substantially. So, they come to the company BOD and argue that company should initiate a secondary share offering at certain price agreed by them (usually average 3-5 days of market price). They would argue that it would benefit (1) the company, because they would guarantee the purchase of those new shares and the company would place the new fund for future development, (2) provide "liquidity" of shares on the market, because they argue that retails are holding up shares and they can't buy them.
This is a classical scenario that happened on Wall Street during at least 30 years.
So, both the institutions and the company would be happy at the EXPENSE OF RETAIL SHAREHOLDERS ! But since they are the one making decision, they would be careless about retails. That's why we have activist hedge funds the like of Bill Ackman.
CONCLUSION: We need to make our voice heard, otherwise we should be ready for share dilusion.