RE:Theory on FinacningYou likely heard Paul say today that they had the good news from the FDA about the cancer phase I before Christmas and the news about the NASH phase III after Christmas. These could have been announced much sooner than they were announced. One could even ask if the company purposefully suppressed material information in order to cram it all together in one atrocious press release I suppose with the hope the stock price would jump. What an incredible failure this all was! No shareholder should forget how badly this was handled.
jeffm34 wrote: As much as I hated the terms and timing of the financing, the thing that confused and bothered me the most was the January 7th news release. They had 3 pieces of great news to release, all 3 of which could be expected to add significant value to the company and share price. Not only did they do it in one single poorly done release, this was the news headline:
"Theratechnologies Announces Preliminary Fourth Quarter and Full Fiscal Year 2020 Revenues and Provides Update on R&D Activities"
Each one of those items deserved its own full news release emphasizing the importance of it with headlines like:
"TH announces record quarterly sales"
"TH gets approval to begin oncology program in multiple cancers"
"TH to start phase 3 NASH trial"
The releases should have been done seperately on different days to keep building momentum off the previous one. Any company would have done that to try and maximize the impact of the news. At first I chalked it up to incompetence or indifference from the company. The more I think about it, there is no way the company didn't announce that incredible news that way without intending to down play and mute the response to the news. Why would they want to do that?
Sometime in December TH receives notice from the FDA that they can proceed with a phase 3 NASH trial and begin the oncology trials. They also know they are going to have record product sales. They look at their cash on hand and determine they need $50M fairly soon to advance the programs as quickly as possible.
Maybe they felt a time constraint so rather than undertaking a long exhaustive search for the best possible deal they went to the investment banks they know and are comfortable with like NBF. They tell them we need $50M right away and it needs to be a bought deal offering so we are guaranteed all the funds. There is no way the banks do that based on the publically available information at that time. TH says by the way we are having record sales this quarter, and have approval to start two huge clinical programs. The banks say ok we will do the deal based on this great news but we are only comfortable taking on the risk of a bought deal if you throw in half warrants and we do it at a price no higher than $3.50CND
They can not complete a deal based on information that is not yet made public. They have to make the news announcement before they can complete the offering. If the share price runs up too high from this great news it would likely jeopardize the bought deal arrangement. What does it take to keep a lid on the share price after you have to announce the best news this company has had in years?
It takes the worst news release in the history of news releases and 2 million shares shorted by the new investors.
Unless of course this deal was thrown together over the weekend between Jan 7 and 11. Then you can throw out this theory.