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Post by scottmnkd on Oct 18, 2018 9:12:03 GMT -5
I was watching CNBC coverage about Netflix today. Only one analyst in the group said it was overvalued. That person emphasized how much money they lose every year and will lose even more next year. The others kept talking about subscriber growth even though the cost of gaining each one of those subscribers was 100x the revenue generated by each subscriber. Sounds like “clicks and eyeballs” used to justify super high valuations in the dot com bubble. (Tesla is another prime example.) My point here is that MNKD can get positive coverage and higher valuations even without being cash flow positive. I somewhat agree. The problem is MannKind has zero credibility with analysts. What they’ve said in the past is “wishful thinking” projections and have lacked in the execution department. It’s one thing for Amazon (Tesla, Netflix, etc.) to eat years of losses to to build up a customer base and distribution network. They clearly explain what they’re doing and do it. MannKind has been bumbling around trying to sell Afrezza, first with a partner, then with an outsourced sales team, then with an internal sales force. All the while cycling through Management teams. When we look at MannKind we see progress, but we (& analysts) have seen it before. With MannKind, it’s always one more thing they need to fix before Affrezza sales takes off. Fix the spirometry test. Fix FDA trials. Fix Label. Fix sales team. Fix insurance coverage. Fix marketing. Fix coupons. Fix doc communication. Fix packages/dosing. Fix. Fix. Fix. Analysts don’t care. Analysts are number guys, they don’t care what the latest excuse is. Analysts want to see the numbers, and management meeting those numbers. Analysts want to see those numbers, then they want to go around and collect data that makes themselves look good. And say, I.e. I think Afrezza sales are going to beat expectations by 20%. Analysts don’t care if MannKind or Afrezza succeeds, they get paid by being right. They’d be perfectly happy to predict a company’s downfall as predict their success. The point is MannKind is to unpredictable. Until they start a success story with a accurate projections, almost all the coverage will be sell side. All the “good news” coming out of MannKind is meaningless until is starts to effect the bottom line. We can only get so far with the stock price with the message being “bankruptcy isn’t imminent”. The dollars coming in need to increase exponentially for analysts (the ones we want) to take interest. I think you nailed it! Prior to Sanofi dropping Afrezza in 2015, Mannkind saw itself as only an innovation and manufacturing company, and management placed all their bets on Afrezza. After Sanofi dumped Afrezza, Mannkind was a one trick pony without a future plan. Realizing that hindsight is 20/20, bad decisions have brought us here. Things are slowly turning around and analysts will eventually take note, but I think analysts don't want to put their necks out and speculate like with Netflix and Tesla - they'd rather see tangible results first. |
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Post by pat on Oct 18, 2018 9:50:57 GMT -5
Sell side analysts are also sales people to a degree. They partially exist to attract primary banking business and secondary trading activity to sell side investment banks. Right now MNKD just doesn’t mean much in the world of biotech. When we start to we’ll get coverage enough. Like Nate says - they’ll love is at 20.
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Post by casualinvestor on Oct 18, 2018 10:11:39 GMT -5
The comparison to Tesla, Netflix, etc isn't really valid for Mannkind. IF MNKD were selling massive amounts of Afrezza at a loss, then that might be a conversation. But biotech companies work in the exact opposite timeline. They sell high initially, and prices lower slowly until competition emerges, then they struggle to keep marketshare and profits drop while they get another drug ready
There are plenty of biotech companies to compare to though, and you guys know them better than I do.
I am liking the options MNKD has for diversification. Inhaled medication can target so many different needs. Technosphere is what kept me in this company (as a gamble) even when Afrezza sales were slacking.
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Post by matt on Oct 18, 2018 10:15:13 GMT -5
Sell side analysts are also sales people to a degree. They partially exist to attract primary banking business and secondary trading activity to sell side investment banks. This ^^^^. Analysis take a lot of time and resource investment so if the bank is not getting some benefit from the expenditure they generally won't cover a stock. Banks that are doing primary issues for securities get investment banking fees for that activity and are more easily persuaded to write coverage even though, in theory, there is no quid pro quo permitted for analyst coverage. Small cap stocks with low share prices just don't attract much attention because there are so many companies in that position. Increase the market cap to several billion dollars and that will change. |
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Post by hellodolly on Oct 18, 2018 10:52:32 GMT -5
Sell side analysts are also sales people to a degree. They partially exist to attract primary banking business and secondary trading activity to sell side investment banks. This ^^^^. Analysis take a lot of time and resource investment so if the bank is not getting some benefit from the expenditure they generally won't cover a stock. Banks that are doing primary issues for securities get investment banking fees for that activity and are more easily persuaded to write coverage even though, in theory, there is no quid pro quo permitted for analyst coverage. Small cap stocks with low share prices just don't attract much attention because there are so many companies in that position. Increase the market cap to several billion dollars and that will change. This and This^^^^^
That's the plan.
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Post by morfu on Oct 18, 2018 11:27:17 GMT -5
This ^^^^. Analysis take a lot of time and resource investment so if the bank is not getting some benefit from the expenditure they generally won't cover a stock. Banks that are doing primary issues for securities get investment banking fees for that activity and are more easily persuaded to write coverage even though, in theory, there is no quid pro quo permitted for analyst coverage. Small cap stocks with low share prices just don't attract much attention because there are so many companies in that position. Increase the market cap to several billion dollars and that will change. This and This^^^^^
That's the plan.
**Ignore the products behind the curtain** Just look at the numbers for the last 5 years.. all loses.. sell it now and sell it short!!! At least that`s what the Fidelity analysis tool seems to say...
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Post by spudspud on Oct 18, 2018 23:02:24 GMT -5
one plausible explanation for today could be fronteunning someone initiating coverage. Just one possible reason anyway
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