Adam, where's the real bloated balance sheet?..let's compare

[joeypotsandpans]

Adam continues to insinuate that MNKD's balance sheet is in trouble....I on the other hand continue to say it's the MNKD's shorts balance sheet that is continuing to balloon while the company continues to get it's house in order...and I am even more convinced after yesterday. Lets take a look at the past 12 mos. shall we:

I listened again to the conference call and would encourage everyone to do the same without any "noise or distractions" like watching a level 2 screen or "squawkbox" (sorry Liane for referring to it that way but you would have thought you were in one with some of the characters participating)

Over the last 12 mos. the company has drastically turned around its cash position and yesterday Matt alluded to the cash burn even diminishing after some one time roll out expenses occurred along with an anticipated pick up in sales as the logistics issues continue to get addressed. Along with that, if he was assertive with any particular point, it was his confidence in not having to do a secondary to address the convertible coming due in Aug. He also mentioned that the numbers that have not been realized ie., milestones will be forthcoming once the auditors conclude and remove any doubt about the company as an ongoing concern.

We all have seen the commercials for UPS and their emphasis on logistics, it is the difference between a company having a streamlined machine and one that is very disruptive. I actually got my business degree with my emphasis on physical distribution and traffic management. You can't underestimate how important that is for certain businesses as the life blood to a company. In this case, the issues will be easily addressed and therefore, you can tell management is confident in getting past the issues whether from the payors, spirometers, and streamlining some of the processes. Little by little over the 2nd Q I believe you will see the improvements reflected in the script counts/sales.

Moving on to the "other side" lets take a look at how they have managed their balance sheet:

A year ago they sat at roughly 65 mill. shares short, one year later (released Monday after the close) I anticipate they will be at least 50% more IN DEBT, yes I reiterate IN DEBT Adam. Now before the goofballs come on and say how can you say that they have gotten the share price to move in their favor so you have to take that into account...lets talk about that. In theory that would be correct if they were able to cover at Friday's closing price or at various times through out the day, and come May 27th we will see where it (SI) stands as of the close next Friday. Yesterday's volume was heavy, but it will be interesting to see just how much was covered...as soon as any covering came in after the lows it shot immediately back to the 4 area which imo had to frustrate the shorts the same as the longs were getting frustrated with the reaction to the conference call as it was getting "pushed" down. So I would venture to say while it is still being carried on the balance sheets and until it can be unwound without any major upshot in price...the DEBT (or SI) will continue to hang around for awhile. 

So in summary, while the company continues to get its house in order, the house that is built with cards remains and the cost to carry that continues to add up....waiting for a sudden gust to bring it down.

Someone posed a question to me in another thread and said why are you happy with this management team? It's the team that Al put in place to get where they currently are. The product is/will continue be in demand and like many have mentioned as the sales build and continue to strengthen MNKD's house....the other house (MNKD's shorts) or as I call it the house of cards will ultimately fall...thanks Adam, but I think I will continue to stick with the less riskier of the two balance sheets IMO

[mdcenter61]

All good points, Joey, I like your style!

I also take issue with Adam's assertion of a "bloated" balance sheet - the only tough thing on the horizon is the debt maturing in August. I suspect that there are plans for either refinancing that debt or paying it off via other means other than dilution - Matt's assertion yesterday of no dilution would create a cottage industry of litigation if dilution did indeed occur.  Would be an epic mistake.

I must admit that I am less than thrilled with this management team, however.  Hakan does not come across well as a confident, inspiring, and energetic leader.  Matt is probably a very capable accounting type for start-ups but as we shift over to a classic production style company I really feel that those two are overmatched by Sanofi and the Street in general.  I am speaking as a CFO myself.

I wish my investment account was bloated, but unfortunately it is very emaciated right now.

Trying hard to keep the faith!

Mike

[fpants]

mdcenter61 Question for you Mike. Did you see any cause for concern about the amount of debt being paid with a Advance from the partnership? I believe it started as $175M and now it's down to $15. I could have that all wrong though.

The line from the call:
"For the quarter ended March 31, 2015, our portion of the loss sharing arrangement with Sanofi related to Afrezza was $12.4 million, which we financed by way of an advance under the loan facility with our partner. The amount outstanding under the Sanofi loan facility is now $15.4 million. "

Didn't that start off at $175M? They seemed to indicate it would just grow as needed but if that's so, why say $175M in the first place? This is just from memory though.

[fpants]

Rereading that, I wasn't very clear. I think I've got it now. The $175M was the line of credit of which only $15.4M has been used.

I'm okay with that.

[mdcenter61]

fpants - its not great ($15mm on SNY line) but its not really material in the overall scheme of this thing - the revenue recognition of this whole thing is relatively bizzaro imo and way too much cloak and dagger stuff regarding the partnership and milestones info. I still feel that there could have been substantive info disclosed at the CC that would have at least shored up investor confidence without hanging their asses out to dry (ie amount of samples produced, more clarity on DTC timing and more sales guidance for remainder of 2015, a little more clarity on why Matt feels Aug 2015 debt can be handled without dilution).

[alethea]

May 10, 2015 19:56:38 GMT -5 mdcenter61 said:

fpants - its not great ($15mm on SNY line) but its not really material in the overall scheme of this thing - the revenue recognition of this whole thing is relatively bizzaro imo and way too much cloak and dagger stuff regarding the partnership and milestones info. I still feel that there could have been substantive info disclosed at the CC that would have at least shored up investor confidence without hanging their asses out to dry (ie amount of samples produced, more clarity on DTC timing and more sales guidance for remainder of 2015, a little more clarity on why Matt feels Aug 2015 debt can be handled without dilution).

He did not provide ANY clarity on the issue of handling the Aug 2015 debt.  Frankly, I do not believe him in this regard.  They are losing 30 million per quarter at the moment, although I think they said quarterly cash disgorged was 20 M.  And 100 million of debt due in August.  It's hard to be optimistic about their mid-term cash flow issues.

It is not a given that refinancing will be either easy or cheap.  If they are able to refinance the 100 M, the interest rate will be high due to MNKD's weak financial position.

[_neil]

Given the history of the Technosphere application trajectory (From 'embarassment of riches' to 'update by end of the quarter' to '12-18 months') I am updating my own valuation of the stock. I used to think ~8$ by the end of th eyear was very likely but now it seems we will not see 5$ before 2016. I believe a fresh round of dilution has a > 70% probablity with the interest rates about to rise and with the board staying as it is.

[notamnkdmillionaire]

The amount of money MNKD has used from the line of credit issued to them by SNY can't be judged at this point of time. But, what will it be at the end of the quarter as it doesn't appear that sales are going to take off anytime soon. Remember, Matt stated they don't foresee being profitable until sometime during 2016 at the earliest.

[joeypotsandpans]

Just as I expected...like rats on a wheel, they continue to get no where as their balance sheet continues to bloat...like I said, the true bloated balance sheet.

4/30/2015 100,934,186 4,967,815 20.317622

With 30 million shares traded between friday and today, lets see what volume is the rest of the week and how much actually gets covered as of this friday's close

[cretin11]

Joey, do you predict that SI has gone up since then, or down?

[joeypotsandpans]

A lot depends on between now and friday obviously so that is 3 more trading days (after today) with a monthly options expiration mixed in. My original point is if net net they are back to say 96 mill and the price is back close to 4 they're back to square one and really accomplished little (maybe freed up some via margin calls, etc.) in the end (keep in mind between last friday morning and up until this post about 37 mill. shares traded)....getting closer to the end game IMO as the law of diminishing returns (and continued interest carry furthering expense ratio of held position) will eventually kick in. This is why I was stating the irony of Adam regarding really which balance sheet has the bigger issues confronting it and also how they have gone in opposite directions, specifically in the last 12 mos.

[joeypotsandpans]

May 9, 2015 16:06:44 GMT -5 joeypotsandpans said:

Adam continues to insinuate that MNKD's balance sheet is in trouble....I on the other hand continue to say it's the MNKD's shorts balance sheet that is continuing to balloon while the company continues to get it's house in order...and I am even more convinced after yesterday. Lets take a look at the past 12 mos. shall we:

I listened again to the conference call and would encourage everyone to do the same without any "noise or distractions" like watching a level 2 screen or "squawkbox" (sorry Liane for referring to it that way but you would have thought you were in one with some of the characters participating)

Over the last 12 mos. the company has drastically turned around its cash position and yesterday Matt alluded to the cash burn even diminishing after some one time roll out expenses occurred along with an anticipated pick up in sales as the logistics issues continue to get addressed. Along with that, if he was assertive with any particular point, it was his confidence in not having to do a secondary to address the convertible coming due in Aug. He also mentioned that the numbers that have not been realized ie., milestones will be forthcoming once the auditors conclude and remove any doubt about the company as an ongoing concern.

We all have seen the commercials for UPS and their emphasis on logistics, it is the difference between a company having a streamlined machine and one that is very disruptive. I actually got my business degree with my emphasis on physical distribution and traffic management. You can't underestimate how important that is for certain businesses as the life blood to a company. In this case, the issues will be easily addressed and therefore, you can tell management is confident in getting past the issues whether from the payors, spirometers, and streamlining some of the processes. Little by little over the 2nd Q I believe you will see the improvements reflected in the script counts/sales.

Moving on to the "other side" lets take a look at how they have managed their balance sheet:

A year ago they sat at roughly 65 mill. shares short, one year later (released Monday after the close) I anticipate they will be at least 50% more IN DEBT, yes I reiterate IN DEBT Adam. Now before the goofballs come on and say how can you say that they have gotten the share price to move in their favor so you have to take that into account...lets talk about that. In theory that would be correct if they were able to cover at Friday's closing price or at various times through out the day, and come May 27th we will see where it (SI) stands as of the close next Friday. Yesterday's volume was heavy, but it will be interesting to see just how much was covered...as soon as any covering came in after the lows it shot immediately back to the 4 area which imo had to frustrate the shorts the same as the longs were getting frustrated with the reaction to the conference call as it was getting "pushed" down. So I would venture to say while it is still being carried on the balance sheets and until it can be unwound without any major upshot in price...the DEBT (or SI) will continue to hang around for awhile. 

So in summary, while the company continues to get its house in order, the house that is built with cards remains and the cost to carry that continues to add up....waiting for a sudden gust to bring it down.

Someone posed a question to me in another thread and said why are you happy with this management team? It's the team that Al put in place to get where they currently are. The product is/will continue be in demand and like many have mentioned as the sales build and continue to strengthen MNKD's house....the other house (MNKD's shorts) or as I call it the house of cards will ultimately fall...thanks Adam, but I think I will continue to stick with the less riskier of the two balance sheets IMO

They stacked a few more cards on top of each other, "who woulda thunk it"....the balloon continues to get stretched, with a simultaneous increase in interest cost to carry, along with the amount of shares needed to cover, some shrewd seasoned players watching may not be able to resist standing on the sidelines much longer before pushing the right buttons IMO. 

Let me point out that each time they have "artificially" driven the price down, it was less effective as the weary staunch longs held with more conviction, there were less weak shares available (other than those that panicked and capitulated) and at the same time most of those who had been on margin most likely have learned their lesson while at the same time most (other than those looking for cheap lottery tickets) are avoiding shorter term call options. The float is extremely tight as evidenced by the non availability of shares to borrow along with the increased interest rate on the existing short shares. I will update the TA this weekend after this friday's close with what could be some pretty interesting updates, one in particular

[joeypotsandpans]

May 9, 2015 16:06:44 GMT -5 joeypotsandpans said:

Adam continues to insinuate that MNKD's balance sheet is in trouble....I on the other hand continue to say it's the MNKD's shorts balance sheet that is continuing to balloon while the company continues to get it's house in order...and I am even more convinced after yesterday. Lets take a look at the past 12 mos. shall we:

I listened again to the conference call and would encourage everyone to do the same without any "noise or distractions" like watching a level 2 screen or "squawkbox" (sorry Liane for referring to it that way but you would have thought you were in one with some of the characters participating)

Over the last 12 mos. the company has drastically turned around its cash position and yesterday Matt alluded to the cash burn even diminishing after some one time roll out expenses occurred along with an anticipated pick up in sales as the logistics issues continue to get addressed. Along with that, if he was assertive with any particular point, it was his confidence in not having to do a secondary to address the convertible coming due in Aug. He also mentioned that the numbers that have not been realized ie., milestones will be forthcoming once the auditors conclude and remove any doubt about the company as an ongoing concern.

We all have seen the commercials for UPS and their emphasis on logistics, it is the difference between a company having a streamlined machine and one that is very disruptive. I actually got my business degree with my emphasis on physical distribution and traffic management. You can't underestimate how important that is for certain businesses as the life blood to a company. In this case, the issues will be easily addressed and therefore, you can tell management is confident in getting past the issues whether from the payors, spirometers, and streamlining some of the processes. Little by little over the 2nd Q I believe you will see the improvements reflected in the script counts/sales.

Moving on to the "other side" lets take a look at how they have managed their balance sheet:

A year ago they sat at roughly 65 mill. shares short, one year later (released Monday after the close) I anticipate they will be at least 50% more IN DEBT, yes I reiterate IN DEBT Adam. Now before the goofballs come on and say how can you say that they have gotten the share price to move in their favor so you have to take that into account...lets talk about that. In theory that would be correct if they were able to cover at Friday's closing price or at various times through out the day, and come May 27th we will see where it (SI) stands as of the close next Friday. Yesterday's volume was heavy, but it will be interesting to see just how much was covered...as soon as any covering came in after the lows it shot immediately back to the 4 area which imo had to frustrate the shorts the same as the longs were getting frustrated with the reaction to the conference call as it was getting "pushed" down. So I would venture to say while it is still being carried on the balance sheets and until it can be unwound without any major upshot in price...the DEBT (or SI) will continue to hang around for awhile. 

So in summary, while the company continues to get its house in order, the house that is built with cards remains and the cost to carry that continues to add up....waiting for a sudden gust to bring it down.

Someone posed a question to me in another thread and said why are you happy with this management team? It's the team that Al put in place to get where they currently are. The product is/will continue be in demand and like many have mentioned as the sales build and continue to strengthen MNKD's house....the other house (MNKD's shorts) or as I call it the house of cards will ultimately fall...thanks Adam, but I think I will continue to stick with the less riskier of the two balance sheets IMO

Let's make that now 100% more in debt just one month later from when I posted this, their balance sheet continues to balloon...I have to tell you, this is reminiscent of credit default swaps and the outcome wasn't pretty...ala Lehman. I did hear about a couple of companies today that have had some interesting parallel situations...one of them is PTBI, take a look at their short interest in just one month they soared and then the run for cover took place:


5/29/2015 2,204,009 4,483,624 1.000000

5/15/2015 2,227,393 17,770,333 1.000000





Read more: www.nasdaq.com/symbol/ptbi/short-interest#ixzz3cbiLvAdi

The price went from $2 to $10 in that two week period.... with respect to the MNKD shorts, I have to believe that hubris, arrogance and ego have overridden their minds to a point similar to when wall st. was printing mortgage backed securities like a pyramid scheme. It worked until it didn't anymore...similar situation here as I had referred to "Adam's house of cards" whereby they are/have been living in a delusional world (see Kliff's comments, etc) ...don't get me wrong, I doubt they are short but just the puppets representing the sources or houses that are. Remember, everyone assumed that the street was sharp and knew something prior to the systemic collapse (except for those few that made billions by buying the insurance on the credit default swaps, see Kyle Bass in the following www.cnbc.com/id/28984151)

I know that there are those that have felt lending shares has aided the short position to keep a "lid" on prices, well it may have helped do that in the beginning but it currently has become their addictive poison and when their drug of choice turns on them as it may be doing, think about the same drug of choice that consumed the collateral mortgage backed obligation traders back in the early 2000's ...same greed, works until it implodes on itself ....for additional thoughts, see thread:

mnkd.proboards.com/thread/2457/law-diminishing-returns  as they had negative returns in the last SI reporting period while throwing the kitchen sink at the accumulators

[oscarlonzo]

"the revenue recognition of this whole thing is relatively bizzaro imo and way too much cloak and dagger stuff regarding the partnership and milestones info. I still feel that there could have been substantive info disclosed at the CC"


Amen to that!