Ohm,
I respectfully disagree as this depends on the investor’s motivations and time-frames.
Let’s assume for constructive argument’s sake that company XXX trading at $100 decides to buy CYDY for a 10:1 stock swap (normally it would be a larger number as the buying company can be much larger than CYDY). As a result, CYDY investors receives effectively $10 per CYDY share (again, this is just an example, let’s assume it bought CYDY @ $1/share) and becomes a stockholder of XXX which has the muscle to advance more rapidly an Oncology indication (say mTNBC) and continue to effectively leverage the CCR5 antagonist in many other conditions.
In conclusion: the CYDY investor has the possibility for selling XXX at market the next day realizing a good gain and using the money immediately in other opportunistic investments (there are many all the time out there). The capital opportunity-loss is diminished in this way.
Another investor by the contrary, decides to remain a XXX shareholder and price appreciates, say 30% with time (meaning few years’ time). His/Her investment in CYDY has appreciated now 1300% (part of the time it at a much lower risk).
The thing is: when would you like to have the money ?? Soon or wait few years to realize one’s ROI ?. Remember the real ROI is not that of CYDY alone, is that of ALL one's portfolio. Currently I would like to have some free cash to invest in some other opportunities. Let me give you an example: I was invested in AUPH since 4/18 ($5.38) as was optimistic about their readouts on voclosporin for lupus nephritis after a very good P2, as time approached on 11/26 noticed an uptrend (somebody knew something) and would have liked to buy many more shares .. (but I couldn’t), sure enough stock jumped 12/05 in positive results.
And, very importantly, the patients will get a very good outcome as the larger company will certainty deliver the drug to the market much quicker and with broader distribution network.
A BO would give investors the possibility to decide what to do.
This is just my opinion, however respect those that are longer time investors and prefer to realize all the potential in an independent fashion, and, I agree with the fact that, perhaps, long term going “solo” might bring a larger ROI to shareholders.
I respectfully disagree as this depends on the investor’s motivations and time-frames.
Let’s assume for constructive argument’s sake that company XXX trading at $100 decides to buy CYDY for a 10:1 stock swap (normally it would be a larger number as the buying company can be much larger than CYDY). As a result, CYDY investors receives effectively $10 per CYDY share (again, this is just an example, let’s assume it bought CYDY @ $1/share) and becomes a stockholder of XXX which has the muscle to advance more rapidly an Oncology indication (say mTNBC) and continue to effectively leverage the CCR5 antagonist in many other conditions.
In conclusion: the CYDY investor has the possibility for selling XXX at market the next day realizing a good gain and using the money immediately in other opportunistic investments (there are many all the time out there). The capital opportunity-loss is diminished in this way.
Another investor by the contrary, decides to remain a XXX shareholder and price appreciates, say 30% with time (meaning few years’ time). His/Her investment in CYDY has appreciated now 1300% (part of the time it at a much lower risk).
The thing is: when would you like to have the money ?? Soon or wait few years to realize one’s ROI ?. Remember the real ROI is not that of CYDY alone, is that of ALL one's portfolio. Currently I would like to have some free cash to invest in some other opportunities. Let me give you an example: I was invested in AUPH since 4/18 ($5.38) as was optimistic about their readouts on voclosporin for lupus nephritis after a very good P2, as time approached on 11/26 noticed an uptrend (somebody knew something) and would have liked to buy many more shares .. (but I couldn’t), sure enough stock jumped 12/05 in positive results.
And, very importantly, the patients will get a very good outcome as the larger company will certainty deliver the drug to the market much quicker and with broader distribution network.
A BO would give investors the possibility to decide what to do.
This is just my opinion, however respect those that are longer time investors and prefer to realize all the potential in an independent fashion, and, I agree with the fact that, perhaps, long term going “solo” might bring a larger ROI to shareholders.
