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Aeterna Zentaris (AEZS) -12% to $0.61 after saying that it's consolidating its shares on a 6-1...

Aeterna Zentaris (AEZS) -12% to $0.61 after saying that it's consolidating its shares on a 6-1 basis as part of an attempt to regain compliance with Nasdaq's minimum bid-price requirement. Aeterna Zentaris expects that the post-consolidation stock will begin trading on Friday. The move will cut the number of outstanding common shares to 18.7M from 112.4M. (PR)
Comments (3)
  • rallyman
    , contributor
    Comments (4) | Send Message
     
    Seems like a good idea to me. So, why the drop Wed morning or is it just automatic suspicion and doubt?
    3 Oct 2012, 11:22 AM Reply Like
  • skitahoe
    , contributor
    Comments (43) | Send Message
     
    I wish I could agree, but reverse splits rarely work and the company could certainly have waited to execute this one until they were actually threatened with the Nasdaq delisting. I grant you, that was in November if they didn't ask for it to be delayed 6 months. Had they asked, I believe the odds were about 99% in their favor of it being granted as they have sufficient funds, and a sufficient market cap for it being granted.

     

    I'll be very pleasantly surprised if by this time next year the share count hasn't grown to at least 25 millions, that may not sound like many shares, but it would represent about 25% dilution. If a few years from now the O/S isn't over 40 million I'll be surprised, that would be over 100% dilution from where we'll be on Friday.

     

    I hope the company proves me wrong, but frankly believe it's the biggest benefit they'll see from the R/S. The good news is the potential of the drugs they've created hasn't changed, but if the dilution is what I expect, we'll see less in all that growth as we'll own a much smaller share of the company.

     

    Gary
    3 Oct 2012, 07:31 PM Reply Like
  • Perkins Cove
    , contributor
    Comments (625) | Send Message
     
    Gary,
    Thanks for that comment.

     

    By the way, AEZS was initiated today (10/9/12) by Maxim Group with a buy, $9 PT
    9 Oct 2012, 08:57 AM Reply Like
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