Implant Sciences Corporation (OTCMKTS:IMSC) Gets Crushed
Implant Sciences Corporation (OTCMKTS:IMSC) took another beating on Friday, dropping another 31.43% before the week’s final bell arrested its descent.
There could be little doubt that this catastrophic slide can be attributed to the details surrounding IMSC‘s latest acquisition. At first glance it seems like a happy occasion, what with the company acquiring another fully functioning entity that will add to IMSC‘s already substantial revenues. However, acquisitions are not free, and in this case IMSC has agreed to pay the piper through the issuance of 50 MILLION shares of its common stock.
This constitutes an overnight dilution of 62.5% – which is certainly a bitter pill to swallow for IMSC investors. However, that’s barely the beginning of the whole ordeal, as IMSC also needs to pay $15 MILLION in cash for the acquisition – and last time it filed, it was $14.7 million short of having that sort of money to spend. Suffice it to say that this does not bode well for its share structure, either.
Another burden said share structure will have to endure are the millions upon millions of warrants for the purchase of IMSC common stock. True enough, said warrants’ owners would not profit from using them at this particular point in time – but they are, nevertheless, not to be ignored.
So, at the end of the day, IMSC may have some achievements tucked under its belt and may talk big about debt restructuring and NASDAQ up-listing, but it is a sad fact that its investor value has taken a beating lately – which is why the ticker is falling.
While it is true that IMSC operates on a whole other level from most OTC Markets underachievers crowding the same tier of the exchange, this does not, under any circumstances, mean that investors eyeing or already committed to IMSC stock can afford to grow slack or complacent, even for a second. The last few sessions have proved that without a doubt.
Long story short – let the buyer beware.