Markets
Yorkville Advisors

Yorkville Advisors Shorting Suit Follows SEC Action

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Only weeks after being accused of accounting regularities by the Securities and Exchange Commission, hedge fund Yorkville Advisors (YA) was sued for short selling violations by investors in Cobalis Corp. Shareholders including Silver Mountain Promotions, R and R Holdings and former Cobalis CEO and president Chas Radovich alleged in a lawsuit that YA manipulated the market for Cobalis stock as part of an improper short selling plan. Data from PlacementTracker indicates that funds managed by New Jersey-based YA invested $6.27 billion in 466 PIPEs and equity lines since 2001. The Silver Mountain plaintiffs filed their suit on Oct. 25 in a New Jersey U.S. District Court.

Deals
PBYI

Puma Bio Follows Reverse Merger with Public Offering

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Puma Biotechnology (PBYI) followed up its 2011 reverse merger with a $138 million underwritten public offering this October. The DPO (delayed public offering) made for a pointed contrast with companies who go public through the reverse merger route and then find themselves starved for capital and visibility. The offering was upsized from an original target of $120 million. While it is relatively easy to register shares with regulators and attempt to sell the registered shares to the public, an underwritten public offering is much more likely to ensure a significant influx of capital, establish lasting ties with investment banks, generate research coverage and establish a presence among investors. Puma reversed merged with Form 10 shell Innovative Acquisitions Corp.

Markets

Alternative IPOs Still in Demand

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A panel at Thursday’s 2012 SEC Government-Business Forum on Small Business Capital Formation that discussed issues not addressed by The JOBS Act included a look at the state of alternative IPOs by John Borer, senior managing director and head of investment banking for New York-based Benchmark Co. By his reckoning, they’re alive and well. And preferable. “If you can get big underwriters to do your IPO for you, go do it,” he said. “But the statistics were 2,000 IPOs (completed each) year 15 years ago.

Deals
TACT

TransAct Shareholder Pushes for Sale

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Chevy Chase, Md.-based Roumell Asset Management, a self-described opportunistic investor, is urging TransAct Technologies (TACT) board members to hire an investment bank pursue a sale of the company amid charges that management has lost credibility with shareholders, according to a filing with the Securities and Exchange Commission. The call for a sale marks the first time Roumell has pursued such an activist strategy, the advisor said in a Nov. 7 letter to the board, noting that it had been “patient and passive” investor in its 14 years in business. But the firm, which controls 9.4% of TransAct’s shares, said it was advocating the move after management failed to adopt value-enhancing strategies. Roumell largely seeks out what it considers to be well capitalized and managed growth companies that are out of the analyst spotlight and undervalued by 30% to 50%.