For all equity investors recent years weeks have been a brutal experience: everyone is poorer compared to what they were at the beginning of the entire year.
Investors in Titan Medical Inc., a business that’s focused “on the look and development of a robotic surgical system for application in non-invasive surgery,” have observed the same pattern.
But with an added dimension: unbelievable volatility.
The shares are actually trading about 50 % the amount these were trading at in the middle of last week using the main news being an overnight marketed offering of units (a $10.5-million deal that closed Friday); and also the company telling the world on Feb. 3 that, in the request of IIROC Market Surveillance, it “is unaware of any material undisclosed development at this time that will cause the recent movement within the Company’s stock price.”
And some shareholders are angry. “As existing shareholders we have suffered the pain sensation of the company raising $10 million,” said one noting that Titan also raised two lots of equity last November, US$4 million through a private placement and $11.5 million via a public offering.
Related
- The long route to innovation success: How one startup is cracking the medical marketBehind RioCan’s decision to redeem its first-of-its-kind rate reset preferreds
-
-
-
Here it’s time line that has caused those shareholders to be upset:
Two weeks back (Jan. 29) the shares traded at $1.30 C a 20 per cent gain for your week;In early part of the following week, the stock closed higher and reached $1.50 on Feb. 2 after hitting $1.83 with an intraday basis. Daily volume was twice the typical;On Feb. 3, after the markets closed, Titan C which closed at $1.45 a share – announced an overnight-marketed offering. It would sell units (shares and warrants) with the terms to be occur the context of the market.On Feb. 4 the shares dropped by almost 35 per cent to $0.95 and fell by a further $0.15 the following day. Volume was a lot more than Ten times the standard.One possible reason behind the large rise in trading is that unit offerings allow investors to buy units and short the stock knowing they are able to cover rapid sale by taking exercise the warrant.Another possible explanation was that contrary to the norm, the offering agent hadn’t attracted enough investors to close the offering before markets opened. At lunchtime on Feb. 4 Titan provided an “update” and said the agent (Bloom Burton) “is continuing to promote the offering,” with further updates provided when available.
Stephen Randall, Titan’s chief financial officer, said, “we were unable to close it the very first thing each morning as anticipated,” adding “some from the commitments did not complete. We never might have gone in it if we didn’t think we’d a full book.”
On Feb. 5 Titan said hello would sell as much as 8.9 million units – with every unit that includes a share along with a warrant C at $0.90 per unit. The price for the units represented a substantial discount to the shares’ closing price the day the offer was announced.On Friday, Titan closed it’s offering: it raised more capital than originally planned but for the very first time in at least per week the stock closed higher.
“It would be a success, because we raised money. We’re an improvement stage company and do things: raise money and spend it,” said Randall noting Titan’s recent experience continues “a pattern we have seen when we do a raise. We believe we get hit by short sellers.”
Financial Post
bcritchley@nationalpost.com
