Thanks to all that gave an update to the CC. That
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Posted On: 01/21/2020 4:01:04 PM
Thanks to all that gave an update to the CC. That morning slot is hard to attend from a work perspective.
I've been thinking a bit about what is better - a 1:1 GNBT div or a 2:5/2:5 G/NGIO div. I'm beginning to think that the NGIO piece might actually be more valuable, at least in the short run. Here's my logic:
We know that when GNBT has advertised the 1:1 div, on the pay date (even if the div was delayed), the powers that be repriced GNBT at 1/2 of what it closed for the day previously (or 60% on the first 2:5 pay date). So while you might have gained a slightly greater percent of the company, the value of your total shares was exactly the same before and after the dividend. In essence, the dividend of GNBT shares was treated as a split.
With the NGIO dividend, since there is currently no value applied to those shares and they apparently have zero value as part of GNBT's pps, any NGIO shares given do not appear to affect GNBT's pps negatively. So you retain the value of the GNBT shares, but you gain the potential value of the NGIO shares when it is spun out and the shares are traded at some price. That makes the NGIO share dividend seem more like an increase in total monetary value, rather than the GNBT dividend (the pps adjusted split model).
The wildcard in this is how the value of NGIO will be received when it's traded, and the effect of the 85% GNBT ownership on GNBT's pps. Since historically we have never seen GNBT valued at what comparable companies are priced at (at least we believe they are comparable), maybe NGIO will break that cycle on the Nas and receive valuations similar to other high potential biotechs that are working on cancer therapies. That could be more lucrative than just having GNBT shares, since for historical reasons, GNBT has not received what appears to be fair valuation. If that trend continues, even if GNBT owns 85% of NGIO, it may not be reflected in GNBT's share price accordingly.
We won't know until it all happens, but right now, I'm not so sure that for the near future, the NGIO shares + the GNBT shares won't be more valuable than the GNBT shares alone. So maybe the change Joe made will actually be in our favor at least for the near future. Hey, I can dream, can't I?
I've been thinking a bit about what is better - a 1:1 GNBT div or a 2:5/2:5 G/NGIO div. I'm beginning to think that the NGIO piece might actually be more valuable, at least in the short run. Here's my logic:
We know that when GNBT has advertised the 1:1 div, on the pay date (even if the div was delayed), the powers that be repriced GNBT at 1/2 of what it closed for the day previously (or 60% on the first 2:5 pay date). So while you might have gained a slightly greater percent of the company, the value of your total shares was exactly the same before and after the dividend. In essence, the dividend of GNBT shares was treated as a split.
With the NGIO dividend, since there is currently no value applied to those shares and they apparently have zero value as part of GNBT's pps, any NGIO shares given do not appear to affect GNBT's pps negatively. So you retain the value of the GNBT shares, but you gain the potential value of the NGIO shares when it is spun out and the shares are traded at some price. That makes the NGIO share dividend seem more like an increase in total monetary value, rather than the GNBT dividend (the pps adjusted split model).
The wildcard in this is how the value of NGIO will be received when it's traded, and the effect of the 85% GNBT ownership on GNBT's pps. Since historically we have never seen GNBT valued at what comparable companies are priced at (at least we believe they are comparable), maybe NGIO will break that cycle on the Nas and receive valuations similar to other high potential biotechs that are working on cancer therapies. That could be more lucrative than just having GNBT shares, since for historical reasons, GNBT has not received what appears to be fair valuation. If that trend continues, even if GNBT owns 85% of NGIO, it may not be reflected in GNBT's share price accordingly.
We won't know until it all happens, but right now, I'm not so sure that for the near future, the NGIO shares + the GNBT shares won't be more valuable than the GNBT shares alone. So maybe the change Joe made will actually be in our favor at least for the near future. Hey, I can dream, can't I?
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