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Post by harshal1981 on Mar 1, 2015 20:27:12 GMT -5
I keep hearing that BOA has some interest in keeping MNKD price below some level . Can any one quickly explain why? What is the background. Thanks in advance.
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Post by Deleted on Mar 1, 2015 21:50:33 GMT -5
The 100 mil note. Part of the deal was that MNKD gave BoA 9mil shares at $5.50ish. Once the note is paid off, BoA owes MNKD the shares back or the $ value.
In turn, BoA sold them to a 3rd party, essentially making them short the stock.
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Post by dreamboatcruise on Mar 2, 2015 17:52:15 GMT -5
The 100 mil note. Part of the deal was that MNKD gave BoA 9mil shares at $5.50ish. Once the note is paid off, BoA owes MNKD the shares back or the $ value. In turn, BoA sold them to a 3rd party, essentially making them short the stock. So it would seem the only incentive would be if they can drive price below $5.50, correct... otherwise they would simply pay the $5.50 rather than purchasing shares to return? Presumably they sold the shares when the price was above $5.50 locking in some level of profit? |
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Post by ezrasfund on Mar 2, 2015 19:18:39 GMT -5
Not exactly, but who can unravel these machinations? It might be helpful in finding out where the battle lines will be.
Here is the transcript from the recent CC; it is 9 million (shares/not dollars) which I have edited.
Ben Shim - MLV & Co.
Right, okay great. And just on the year-end share count, the 406.1 basic shares, that's before the [$]9 million [share] stock loan arrangement, right? Or is that inclusive?
Matthew Pfeffer - CFO
That is not, does not include the [$]9 million [shares] because those will come back to us, they're not considered to be circulating for that purpose.
So B of A had to sell the shares into the market to hedge the loan with MNKD (shares cannot be a hedge against failure to repay a loan, because they would then be worthless). But how do they hedge their short position? Previously Matt had said that B of A might rewrite the loan, and that might be an opportunity to renegotiate the collateral issue. Or B of A might have closed out there short position as the milestones of approval, partnership and launch were reached.
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