Lack of communication = no accountabilityhere are some facts on which to evaluate management's motives & attitudes, which imo take on greater importance & significance to shareholders when management fails to provide shareholders with sufficient information about operations of their company & management performance, communication that even those who are “satisfied” with management seem to agree is lacking.
1. thompson's first official act in dealing with onc was to have his name included together with lee, coffey & strong & uti (onc's actual "founders") as part of a royalty agreement which entitled him to personal royalties on ALL future sales of reovirus, even though he was sitting on the other side of the negotiating table from the founders, representing SYNSORB shareholders.
2. in this most recent financing, BT apparently confirmed to some that onc was approached if they wanted the money, clearly suggesting they weren't the ones that initiated this financing. this is supported by his often repeated claim in his roadshows that onc has enough cash to last them to 2007 based on current & anticipated trials. in fact, onc has $15M of potential cash inflow by October 2005 from the exercise of warrants outstanding, as of their last quarterly report (assuming of course that there would be news to drive up the stock price to make the conversion of the warrants happen.)
so thompson didn't need this financing to begin with and everyone expects at least somewhat positive news from the UK or Cdn glio trials (or start of NIH combo trials in the US) within the next 12 months which would assure conversion of previous warrants issued, and an additional $15M injection of cash, as well as a higher share price (which would serve to reduce shareholder dilution).
nevertheless, he decides yet again to dilute small, long term shareholders' equity by issuing shares to a hedge fund, therby making them the largest single shareholder of the company, a shareholder who in less than two weeks of taking ownership of those 1,504,000 common shares and 752,000 shares represented by warrants, discloses to the SEC that as of Dec. 3, they beneficially hold only 810,075 of those 1,504,000 shares, but somehow increased their shares represented by warrants by 460,000. In any case, in a matter of less than two weeks, amaranth has disposed of 233,925 net shares or over 10% of what they received from onc, all while the price has been falling, well below what they paid for those shares. not surprisingly, no one has offered any plausible explanation (other than covering someone’s short position) to account for the discrepancy in amaranth's shares.
This is not the first “opportune” financing that BT has surprised shareholders with – in fact, in between the two events noted above, there have been all kinds of similar “surprise” financings as well as other examples of questionable and unexplained moves by management –delay in releasing phase I results (in fact they still haven’t been officially released iirc), delay in releasing ph II prostate results (despite only 6 patients), tth misadventure that cost 10% dilution to shareholders (a group thompson isn’t a member of), 2+ year delay in US glio app, his failure to disassociate himself from a dubious Calgary public company listed on the OTCBB, and on & on.
And when he does actually communicate, there are too many times it is flippant and arrogant – telling a reporter in response to a question about why the surge in stock volume & price, that nothing material is happening at the company, or comparing the FDA to God.
the above is suggestive of a pattern of putting himself above the interests of ordinary & especially small shareholders. In fact, I am starting to believe that he is trying to put himself in the best position to negotiate his own personal royalty, at the expense of shareholders, and before anyone suggests that is outrageous, re-read points 1 & 2 above – they are incontrovertible evidence that he doesn’t care about unnecessary dilution but he does care a lot about looking after himself first.
I will make a not so bold prediction – if Thompson’s questionable leadership & management of a company in which he owns no shares continues to be supported, much less held to account by putting in place a respected, reputable, proven & independent outside executive as chair of the board, shareholders will only get what they have been getting to date & what they deserve – unfulfilled milestones, unnecessary dilution, broken promises, no accountability and no real delivery on the promise of the science.
That will lead to further erosion of the stability of the shareholder base, making it all the more difficult to attract & keep committed longer term shareholders like curtis, Ontario teachers pension fund, and imo mellon, besides the small but long timers here. That will only serve to contribute to the continuing cycle of unnecessary dilution to temporary, non-committed shareholders who are looking to make a quick buck more than getting the science approved for use by cancer patients and being rewarded on that basis.
the indifference to the above scenario is outrageous to me, whether it is on the part of BT or his supporters.