Disclaimer: None of this is investment advice. The logic here may be bad and should not be relied upon. My assumptions may be bad and should not be relied upon. This post reflects my opinion. I may hold positions in securities I write about, and I believe in what I write.
I told my wife yesterday that if I were in the position to fight the shorts on the level we’re seeing, I’d regroup and go for the Monday and Tuesday approach of make the shorts try to push it down below $1 instead of trying to fight up to cross a dollar like on Wednesday. I hit the Publish button this morning at 8:02 (11:02 ET).
It was in the $0.80s when I started writing and around $0.97 when it went out. Since then it’s been above $1 and fighting to keep that ground.
If EVFM doesn’t close at or above $1 for 10 days in a row, Evofem risks being delisted from NASDAQ. But who benefits most from that?
In the event that (i) the Funding Threshold has not been met on or prior to the first anniversary of the Initial Closing, or (ii) at any time after the six-month anniversary of the Initial Closing, the Company is unable to issue the full amount of shares issuable upon conversion of the Notes or upon exercise of the Warrants, the noteholders will have the option to require the Company to repurchase all or any portion of the Notes in cash. In such case, the redemption price will equal 110% of the Outstanding Balance plus accrued and unpaid interest. In the event of an Event of Default or the Company’s Change of Control or liquidation (in each case, as defined in the Securities Purchase Agreement), each Purchaser may elect, at its option, to require the Company to repurchase all or any portion of the Notes in cash at a repurchase price equal to the sum of (x) three times the sum of the Outstanding Balance plus (y) the aggregate value of future interest that would have accrued under the call principal amount from the period commencing on the date on which such amount is declared to be due and payable through the fifth anniversary of the Initial Closing.https://www.sec.gov/Archives/edgar/data/1618835/000161883520000081/evfm8-kbakerbros.htm
I do not know for absolute certain that it’s Baker Bros. using its strength of its $22.8 billion in assets under management doing all the shorting, but if they can demand payment of triple the loan amount plus future interest, it sure seems like they can take the company and all its stuff.
Can you think of higher praise for what Evofem is doing?
If it’s true that Baker Bros. is the firm shorting EVFM, I believe it’s likely because the company itself has such upside that Julian and Felix Baker see it as a way to make moar billionz and keep it all to themselves. So much so that they’re willing to borrow at crazy rates just to make sure that happens.
I’m even happier now to own EVFM.