Any take over would know all they need do is simply wait another two years while VLA burns through its cash and gets to the point of needing to raise revenues again.
For the moment, lacking fundamentals, technicals are all the SP has to go on and for the moment it is as bearish as they come. With no dividend to support a share price (understandable given the nature of this stock), it is simply expensive to hold considering the opportunity costs if moneys were instead invested in other stocks.
No fund manager will want to invest in this stock at the moment given its bearish pattern. This is a massive failure on managements behalf as they should be watching the SP and making timely announcements at critical moments to prevent bearish patterns forming. To say they were not focussed on the stock price is not ideal. It neither comforts investors or helps the price recover.
Basically anyone thinking of a takeover will simply:
1. Wait for VLA to start running out of cash (could be 2 years at current rate) this will enable them to get a cheaper price as shareholders will be keen for a buyout to avoid further dilution.
2. Wait for VLA to get cheaper - The current bear trend in the SP is showing no signs of reversing with management showing little care to the point of saying they were not focussing on it
3. The longer it takes, there is further chance of competitors coming to market
and as a side note, why did VLA have such a huge sum sitting in the bank in the first place not being spent? I understand they are struggling to find patients for the studies? well up the amount being offered. The longer this whole process takes the more it costs shareholders as, without dividends and a depreciating share price while at the same time the rest of the market is booming, the clock is not on our side.
Either find a buyer or hurry the hell up and get the thing to market and in the meantime make some announcements, get on TV and do some promotion to stabilize the share price. If they are TV shy hire someone who isn't.
VLA Price at posting:
63.0¢ Sentiment: Hold Disclosure: Held
