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Post by peppy on Feb 25, 2016 10:52:32 GMT -5
Companies are in business to make money. We human beings have been raised, there is a "right and wrong behavior"
Here is the question. Sanofi is in business to make money. Why would Sanofi NOT short Mannkind, if they knew they were going to drop the deal and they knew Mannkinds Financials?
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Post by BlueCat on Feb 25, 2016 10:57:32 GMT -5
Companies are in business to make money. We human beings have been raised, there is a "right and wrong behavior"
Here is the question. Sanofi is in business to make money. Why would Sanofi NOT short Mannkind, if they knew they were going to drop the deal and they knew Mannkinds Financials?
I don't know - but I would be surprised if that wouldn't constitute 'insider info'. Certainly in practice and theory it would. But then, the same logic would apply to buying, so .... |
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Post by bushman on Feb 25, 2016 10:58:51 GMT -5
Companies are in business to make money. We human beings have been raised, there is a "right and wrong behavior"
Here is the question. Sanofi is in business to make money. Why would Sanofi NOT short Mannkind, if they knew they were going to drop the deal and they knew Mannkinds Financials?
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Post by coo2002coo on Feb 25, 2016 11:16:52 GMT -5
Companies are in business to make money. We human beings have been raised, there is a "right and wrong behavior"
Here is the question. Sanofi is in business to make money. Why would Sanofi NOT short Mannkind, if they knew they were going to drop the deal and they knew Mannkinds Financials?
Shorting MNKD while being its marketing partner is unethical and may breach fiduciary duties. Nevertheless, people involved in the deal may have the "insight" of (or from) SNY to short MNKD and get rich. Again, this is pretty difficult to nail this sort of behaviour, especially when too big the stake is involved. Just my 2 cents. |
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Post by kc on Feb 25, 2016 11:20:44 GMT -5
I don't think they have a person in their treasury services department who is sitting there investing or shorting the market. Perhaps I might be naive but I think that the games being played are by hedges and market makers playing the market. Sanofi might play the market on their stock but not Mannkind.
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Post by bushman on Feb 25, 2016 11:25:55 GMT -5
Do we have any idea of what the cost the shorts have in their game? How far would the stock price need to move for them to start to cover? Any thoughts Joey or others?
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Post by peppy on Feb 25, 2016 11:28:30 GMT -5
I don't think they have a person in their treasury services department who is sitting there investing or shorting the market. Perhaps I might be naive but I think that the games being played are by hedges and market makers playing the market. Sanofi might play the market on their stock but not Mannkind. When I look at the balance sheets, the 10 k and 8 k companies buy stocks of other companies all the time.
The banking sector, JPM, GS, they will name them some times, like when JPM sold VISA at presplit highs. As you know the federal reserve has been buying the banking debt from the broker dealers and giving the broker dealers the money, and they have bought the market with it. Quantitative easing, 1,2,3 and operation twist. SPX 2134. 
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Post by BlueCat on Feb 25, 2016 11:43:14 GMT -5
I don't think they have a person in their treasury services department who is sitting there investing or shorting the market. Perhaps I might be naive but I think that the games being played are by hedges and market makers playing the market. Sanofi might play the market on their stock but not Mannkind. When I look at the balance sheets, the 10 k and 8 k companies buy stocks of other companies all the time.
The banking sector, JPM, GS, they will name them some times, like when JPM sold VISA at presplit highs. As you know the federal reserve has been buying the banking debt from the broker dealers and giving the broker dealers the money, and they have bought the market with it. Quantitative easing, 1,2,3 and operation twist. SPX 2134.
I think where it gets strange is if they short with exclusive knowledge that they are going to take an action which will result in significant change in the company's stock price. That would seem clearly illegal. Different if they are investing in a company they are doing business with (or not), based on information that has already been shared with the public. NOW - that doesn't prevent them from NOT investing. I recall Matt saying that SNY hadn't invested "yet" last Fall. Well, makes sense based on what they knew. Nothing forces them to buy. And certainly this was hailed as a 'sign' but those on the bearish side. |
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Post by jurystillout on Feb 25, 2016 11:49:26 GMT -5
Companies are in business to make money. We human beings have been raised, there is a "right and wrong behavior"
Here is the question. Sanofi is in business to make money. Why would Sanofi NOT short Mannkind, if they knew they were going to drop the deal and they knew Mannkinds Financials?
Maybe a little rule about insider trading, Martha Stuart could provide a little more info on this issue |
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Post by babaoriley on Feb 25, 2016 12:59:51 GMT -5
Companies are in business to make money. We human beings have been raised, there is a "right and wrong behavior"
Here is the question. Sanofi is in business to make money. Why would Sanofi NOT short Mannkind, if they knew they were going to drop the deal and they knew Mannkinds Financials?
There are few open and shut cases in law; Peppy, you've just described one of them.  |
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Post by lakon on Feb 25, 2016 13:29:08 GMT -5
While illegal in this case for SNY to short MNKD, it is easy to get around the insider trading rules, and it is difficult to prove. A combination that is not conducive to regulator success. Globally with international players, I dare say it is next to impossible for the SEC, and the SEC is not real active in going after big players [for real] anyway. Look at the financial crisis. Watch the movie, "The Big Short." Sure, Martha S. was a poster child to show who's in charge with a perp walk, but seriously, only stupidity and enemies got her in jail. Jim C. and Co. discussed how analysts talk directly and indirectly through intermediaries to get the TELL that the fix is in. Often, it is not even illegal; however, it would be nearly impossible to prove that GS got a hint and/or passed it on to their hedge fund clients. They do the shorting, and it is easy street when SNY, or subsidiaries, need to raise capital. Maybe, one of those SNY employees starts a new company. Then, financing is easy. Maybe, even, SNY buys them out later. That's all part of the game. You cannot stop it. Some have suggested that insider trading laws should be stricken from the books because it would result in better information liquidity, as the word would get out quicker from leaks with no legal consequence. Regulation is theatre to a large extent. I am more interested in if the regulation is cost effective. I doubt that it is. I like Ike. If they can get away with subprime and make you pay for it, there is no chance of stopping what you suggest about SNY. Learn to live with it as another part of due diligence. www.slideshare.net/guestd5ab54/the-subprime-primer |
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Post by matt on Feb 25, 2016 14:21:30 GMT -5
Fiduciary obligations are not as easily created as you might expect and, in the absence of a fiduciary obligation, trading on non-public information is not illegal. Consider the case of the New York taxi driver who overheard details of a pending deal as it was discussed by investment bankers in his cab. He invested all he had and made a killing when the deal happened a few days later. The court ruled that while the bankers had an obligation not to trade on the information, just because they happened to get into his taxi that obligation did not extend to the cabbie. He got to keep the money.
Sanofi would be a closer question because it was predictable that their decision to end the deal would hurt MNKD in a significant way. But if they had bought long-term puts on MNKD back before the product launched, as a way to hedge their downside, that would likely have been kosher.
The bottom line is that pharmaceutical companies make their money flogging pills (and inhalers) and not from playing the markets. Almost every securities play made in the industry has some relation to a past or present investment exposure, such as hedging foreign currency risks or holding some remaining shares in a spun-off subsidiary or past venture capital investment.
If you want to make your living speculating on financial securities, you go into investment banking. If you want to make it marketing healthcare products, you go into pharma. Rarely do the two mix.
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Post by dreamboatcruise on Feb 25, 2016 14:27:44 GMT -5
Companies are in business to make money. We human beings have been raised, there is a "right and wrong behavior"
Here is the question. Sanofi is in business to make money. Why would Sanofi NOT short Mannkind, if they knew they were going to drop the deal and they knew Mannkinds Financials?
There are few open and shut cases in law; Peppy, you've just described one of them. I'm SNY... I'm shelling out $150M on this untested (in the market) drug Afrezza. It might not succeed. Isn't it legit that I might buy some MNKD puts as a hedge on this deal? No I don't think they did that. |
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Post by babaoriley on Feb 26, 2016 1:52:09 GMT -5
dbc, different fact set; not open and shut, like peppy's facts, but sure smells.
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Post by avogadro on Feb 26, 2016 9:40:55 GMT -5
Here is the question. Sanofi is in business to make money. Why would Sanofi NOT short Mannkind, if they knew they were going to drop the deal and they knew Mannkinds Financials?
Shorting your marketing partner and then dragging your feet in marketing efforts to ensure success of the short is betrayal and treachery beyond description. Even the French would not go that far. |
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