A lot has been made of the decision by Israeli bio-pharma company Vascular Biogenics, operating as VBL Therapeutics, to terminate the underwriting agreement for its Nasdaq IPO several days after the US$64.8m deal had already printed. On the basis of the information available, it seems to be a simple - albeit unusual - case of an existing shareholder not keeping to their agreement to purchase a substantial line of stock in the offering, leaving the lead underwriters Deutsche Bank and Wells Fargo high and dry and in breach of material information contained in the prospectus that could have left them vulnerable to litigation. Existing shareholders had committed to purchasing almost 54% of the stock, and you imagine outside shareholders would have relied on that both as a guide to price performance and as a show of support for the company. As is pretty typical, VBL is owned by insiders. Company executives, directors, 5% shareholders and affiliates beneficially owned around 78.5% of voting shares in the run-up to the IPO. If they had purchased all of the shares as agreed, they would still have owned 71.2%.
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