Dendreon urges ‘extreme caution’ in trading its shares
Dendreon said its shares will be delisted from Nasdaq next week and warned again that stockholders should expect to get nothing from its restructuring.
By Seattle Times business staff
Dendreon urged “extreme caution” for anyone thinking of buying the Seattle biotech company’s stock following its Monday bankruptcy filing, warning that the shares “will be highly speculative and will pose substantial risks.”
The company also said in a regulatory filing Wednesday that Nasdaq is expected to delist the stock effective Nov. 19, and Dendreon will not challenge that move.
Dendreon’s filing also reiterated that restructuring or liquidating its assets in Chapter 11 bankruptcy is likely to leave nothing for shareholders, and they will not get a vote on whatever reorganization plan emerges.
The warnings may seem obvious, but trading in Dendreon shares has been heavy since the bankruptcy filing before the market opened Monday. In regular trading Wednesday, the stock was up 6.6 percent or 1 cent to 16 cents.
Some of that trading may reflect short sellers who are closing out their positions rather than waiting for any further decline. Short sales — in which traders borrow shares and sell them, hoping to profit when the stock goes down — stood at 31.3 million shares or nearly 20 percent of outstanding shares on Oct. 31, according to Reuters.
But some commenters on Twitter seem to be promoting the idea that the stock would rise again, despite the warnings.
“Why do I get the feeling that $DNDN is gonna hit .40c lol??” wrote a Twitter user going by the name @mdela0880.
In Monday’s Chapter 11 filing, the company set a minimum bid of $275 million for its facilities and intellectual property; if no such bid emerges, ownership will be turned over to the noteholders who have $620 million in Dendreon convertible debt.
The company also said it expects production and availability of its prostate-cancer treatment Provenge to continue during the Chapter 11 process.