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Posted On: 02/13/2021 10:22:30 AM
Post# of 148899
Has anyone rebutted Midas letter analysis
Of what he calls teh downside risk to cydy?
http://midasletter.com/2021/02/cytodyn-cydy-p...d-any-day/
This excerpt concerned me
So, they have been reduced to accepting shareholder-hostile OID debentures with ugly conversion terms that create a short-seller’s wet dream.
In November, they borrowed 28.5 million from Streeterville Capital of which only $25 million was paid to the company; $3.4 million is the discount the Streeterville pockets, and $100k is set aside to cover the expenses. Streeterville is associated with Illiad Trading and Research, which is controlled by John Fife of Chicago Ventures Inc. Iliad has been called a “legendary so-called toxic lender”, by rival research firm Utopia Capital Research.
Under the terms of the deal, Cytodyn has to pay back $7.5 million a month. If they don’t have the cash, they pay in stock; most recently, at a conversion price of $3.40 a share.
Now just imagine if you’re an opportunistic low-rent lender and you’ve got a guaranteed 2.2 million shares coming your way in the first week of each month. Any price above the conversion price is pure profit. Remember – this guy isn’t an investor; he’s a lender.
He’s not operating on the expectation that Cytodyn stock could go parabolic if leronlimab is deemed a cure for ARDS; his business model is to limit risk and maximize upside through discounted conversion of share.
This is the short seller’s wet dream I’m talking about. Not only is the lender enticed to go short, but any short-trading bucket shop in town who can fog a mirror and read an EDGAR filing know that every month, like clockwork, there’s going to be 2 million+ shares hitting the bid down to $3.40
Of what he calls teh downside risk to cydy?
http://midasletter.com/2021/02/cytodyn-cydy-p...d-any-day/
This excerpt concerned me
So, they have been reduced to accepting shareholder-hostile OID debentures with ugly conversion terms that create a short-seller’s wet dream.
In November, they borrowed 28.5 million from Streeterville Capital of which only $25 million was paid to the company; $3.4 million is the discount the Streeterville pockets, and $100k is set aside to cover the expenses. Streeterville is associated with Illiad Trading and Research, which is controlled by John Fife of Chicago Ventures Inc. Iliad has been called a “legendary so-called toxic lender”, by rival research firm Utopia Capital Research.
Under the terms of the deal, Cytodyn has to pay back $7.5 million a month. If they don’t have the cash, they pay in stock; most recently, at a conversion price of $3.40 a share.
Now just imagine if you’re an opportunistic low-rent lender and you’ve got a guaranteed 2.2 million shares coming your way in the first week of each month. Any price above the conversion price is pure profit. Remember – this guy isn’t an investor; he’s a lender.
He’s not operating on the expectation that Cytodyn stock could go parabolic if leronlimab is deemed a cure for ARDS; his business model is to limit risk and maximize upside through discounted conversion of share.
This is the short seller’s wet dream I’m talking about. Not only is the lender enticed to go short, but any short-trading bucket shop in town who can fog a mirror and read an EDGAR filing know that every month, like clockwork, there’s going to be 2 million+ shares hitting the bid down to $3.40
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