This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

When is a Warrant Not a Warrant? When Northwest Bio is Raising Money.

You'd think I could get a few days off from writing about Northwest Biotherapeutics (NWBO), but no. 

I'll keep this brief, but there's a couple of important points to be made about Northwest Bio's announcement of an "up to" $32 million financing.

1. Northwest Bio raised $15 million by selling stock at $6.60 per share, an 8% discount to Wednesday's closing price. The $32 million haul is aspirational and assumes the single investor in the deal later decides to buy the $17 million "non transferable oversubscription option."

2. Northwest Bio claims today's financing includes no warrants. Well, that's a bit of a fib. The "non transferable oversubscription option" is a warrant, even if you don't want to call it a warrant. 

From today's press release:

The Stock Purchase Agreement also provides a non-transferable Oversubscription Option for the investor to purchase up to $17 million of common stock at $7.50 per share (approximately 5% premium to the closing market price) during the twelve months following the initial closing.
My finance dictionary defines a warrant this way:
A warrant is a security that entitles the holder to buy the underlying stock of the issuing company at a fixed exercise price until the expiry date.

No difference, except semantics. 

Who bought this Northwest Bio deal? A finance source tells me the single investor is Heights Capital Management, an investment fund which specializes primarily in PIPE deals. The firm also files under the name Capital Ventures International. 

Based on Heights' investment M.O. and the deal terms, Northwest Bio did not land a new, fundamentals-based shareholder who believes in the brain cancer vaccine DCVax. This is more likely a straight-up vulture financing in which Heights Capital gets below-market stock that can be easily flipped for a quick profit. The "oversubscription option" is free money which can also be shorted against.

One more thing: The DCVax efficacy interim analysis AWOL for months now may finally come out of hiding now that the financing is done. The company no longer has to worry about the stock tanking.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Adam's Tweets

Select the service that is right for you!

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
Real Money Pro

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Trifecta Stocks

Trifecta Stocks analyzes over 4,000 equities weekly to find the elite 1% of stocks that pass rigorous quantitative, fundamental and technical tests.

Product Features:
  • Model portfolio
  • Trade alerts
  • Recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Growth Seeker

Chris Versace, using sophisticated stock screening and fundamental research, identifies potentially explosive small and mid-cap stocks.

Product Features:
  • Model portfolio
  • Small-cap and mid-cap focus
  • Intraday trade alerts
  • Weekly roundups
Daily Swing Trade

Master swing trader Alan Farley uses his sophisticated software screens to review thousands of stocks each day for you, to find just the handful that meet his demanding criteria.

Product Features:
  • Daily commentary and coaching on swing trading
  • Technical charts and analysis
Top Rated Stocks Top Rated Funds Top Rated ETFs