The PIPEs Report - April 15, 2006

Confident Market Drives a Pulsating PIPE Pace, But Can it Continue?

The PIPE market set a furious pace in the first quarter of 2006, riding a robust broader market. Not only did the widespread bullish sentiment buoy the PIPE market, but some trends in the first quarter also veered sharply from those set in 2005, as capital favored common stock deals and an innovative PIPE investor shifted strategies. Full Story

The three-year-old investigation by the SEC and the Department of Justice into short sale fraud by PIPE fund manager Rhino Advisors against software company Sedona Corp. took a major turn earlier this month when the SEC filed a civil action against several traders who allegedly short sold Sedona’s stock in order to drive the share price down so that one of Rhino’s funds, Amro International, could financially benefit from variable-priced convertible securities it held. One of the defendants, Andreas Badian, is a familiar name in the ongoing Sedona investigation, as the Department of Justice moved three years ago in a criminal complaint against him and his brother, Thomas Badian, for similar activities. Full Story

Global warming can’t compare to the heat coming out of the Canadian mining sector these days. As most base metal commodities trade near or at multi-year highs, Canadian mining companies are coming to market at a record pace, with issuances of securities accelerating quarterly. Investors are eagerly lapping up the supply and reaping stellar rewards in the process. Can the surge in PIPE activity continue, or is this just an example of companies jumping to issue while the window is temporarily open? Full Story

• Small Cap SOX Battle Looming
• Former Biopure Board Member Settles with SEC
• Sirna Partners with GlaxoSmithKline
• Thomas Equipment Scoops Paydirt
• Moab Partners Launches Event Driven Fund
• Former Connectics Insider Receives Injunction
• Hana Initiates Phase II Trials
• Electro Energy PIPE Fuels Growth
• Tapestry Takes in $25 Million
• Hirings & Firings

After limping through February with mostly flat returns, hedge funds bounced back into positive territory this March, outpacing the S&P 500 and Dow Jones Industrial Average. Greenwich-Van reported that hedge funds in its index posted the best single-month return since the second quarter of 2003 with 1.88%, and nine out of 10 hedge fund managers posted positive returns. Full Story