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Post by liane on Jun 24, 2016 19:47:16 GMT -5
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Post by brotherm1 on Jun 24, 2016 21:05:07 GMT -5
So if I read the notes at the Russell site correctly, the reconstitution with MNKD is effective in the index after the market close on June 24, today. Would that be the reason for the high volume today, particularly near the close of trading?
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Post by rvc on Jun 24, 2016 21:18:07 GMT -5
So if I read the notes at the Russell site correctly, the reconstitution with MNKD is effective in the index after the market close on June 24, today. Would that be the reason for the high volume today, particularly near the close of trading? that would do it |
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Post by mnkdfann on Jun 25, 2016 8:45:30 GMT -5
The Russell Preliminary U.S. Index Additions & Deletions were posted a couple of weeks back (circa June 17) ... If you google, you can find that Russell announced its prelim lists (and some companies were advertising their inclusion in press releases at the time). No doubt some of the smarter investors took advantage of that publicly posted news to buy Mannkind (and a lot of other stocks) prior to the index reconstitutions. To capture the share price increase as Russell and its followers were buying. And that probably explains a portion of the price rise over the last 10 days or so. Now that the index buying is over, there might be some price reversal next week as buying slows. If someone posted the preliminary list of additions on this site, I guess I missed it. And I wasn't cognizant enough to notice it on my own at the time.  |
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Post by uvula on Jun 25, 2016 9:26:03 GMT -5
I am really surprised that no one mentioned the Russell thing ahead of time. The detectives here are great at digging up info ( even if most of it is imaginary). How did we all miss this?
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Post by gamblerjag on Jun 25, 2016 11:15:26 GMT -5
ok Help!!.. How is being part of the Russell microcap a big deal?. Why wasn't MNKD added when MNKD was 6 7 8 or 9 bucks. Is it because now it's only 1.25...? What is the benefit.. exposure..? Isn't part of the NASDAQ considered a bigger deal. have a good weekend. Thanks for any insight.
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Post by Deleted on Jun 25, 2016 12:05:55 GMT -5
ok Help!!.. How is being part of the Russell microcap a big deal?. Why wasn't MNKD added when MNKD was 6 7 8 or 9 bucks. Is it because now it's only 1.25...? What is the benefit.. exposure..? Isn't part of the NASDAQ considered a bigger deal. have a good weekend. Thanks for any insight. Nasdaq is exchange. Russell is index |
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Post by factspls88 on Jun 25, 2016 12:16:39 GMT -5
Thanks for posting!
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Post by matt on Jun 25, 2016 12:53:42 GMT -5
ok Help!!.. How is being part of the Russell microcap a big deal?. Why wasn't MNKD added when MNKD was 6 7 8 or 9 bucks. Is it because now it's only 1.25...? What is the benefit.. exposure..? Isn't part of the NASDAQ considered a bigger deal. have a good weekend. Thanks for any insight. The reason it is important to be part of practically any index is that there are mutual funds that track all of these indices. You want to invest and be guaranteed the returns like the S&P 500? No problem, put your money in an S&P Index fund and the fund managers will give you that exact return at a cost of about 8 basis points per year. Trading in the fund is all computer driven so the fund always owns the exactly correct 500 stocks and in the exact proportion to their weight in the index. Since the computer doesn't get a management bonus the fees are very small. If you don't like the S&P 500 then there are funds that do biotech, oil & gas, small cap companies, foreign companies, etc. all with diversified holdings and reasonable management fees.
The index fund guarantees the return on the index so it must absolutely must own each and every stock in the index, so there is guaranteed demand for the stock to the extent of the demand for the index. Remember, there is no fund manager picking the investment because it is all done by computer. So when a stock enters an index, there is a big buy-in that happens as we have seen this past few days. Conversely, the knife cuts in the other direction as well and if Mannkind gets dropped from the index the computers will be totally unemotional and sell 100% of their holdings. A lot of "institutional ownership" is not smart money fund managers placing bets on a stock, but rather a computer somewhere continually rebalancing its target portfolio, and to the extent that many of the large brokers run index funds, that ownership shows up as Fidelity, Goldman Sachs, State Street, and so on even though they have nothing to do with the buying or selling decisions.
So is it good or bad? If Mannkind appreciates relative to the rest of the funds in the index then the computers will have to rebalance their index weighs and buy more Mannkind and sell the other stocks, which in turn will amplify the share price gains, but it will also amplify the losses if Mannkind underperforms the index and the computers sell to rebalance. Demand for the index will, indirectly, drive some demand for Mannkind because if more people want to put more money into the Russell Microcap Index, the computer will dutifully take their money and buy the stock, and vice versa. Overall, except for the days when a share is added or dropped from a particular index, or when a serious rebalancing occurs, I think it is a neutral.
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Post by mnkdfann on Jun 25, 2016 13:06:58 GMT -5
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Post by brotherm1 on Jun 25, 2016 13:12:07 GMT -5
ok Help!!.. How is being part of the Russell microcap a big deal?. Why wasn't MNKD added when MNKD was 6 7 8 or 9 bucks. Is it because now it's only 1.25...? What is the benefit.. exposure..? Isn't part of the NASDAQ considered a bigger deal. have a good weekend. Thanks for any insight. Nasdaq is exchange. Russell is index I don't know how big of a deal it is gamblerjag. I don't know how many funds have bought or will buy stocks such as MNKD for their microcap portfolios meant to mimic this Russell microcap index. I'm thinking though that the large volume yesterday - and perhaps recently earlier - was at least partly due to a microcap index fund or more meant to mimic this Russell index buying MNKD for their micropcap portfolio. Perhaps a fund such as iShares Micro-Cap ETF |WC. If such funds buy more shares of MNKD in the future, it would help our share price. If on the other hand they sell MNKD shares, it would of course have the opposite effect. Editing now: yea, what Matt said above. |
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Post by nylefty on Jun 25, 2016 13:33:11 GMT -5
Schwab, which currently rates MNKD as a "C" stock, says this:
If you're a short-term trader, you might want to take advantage of the Russell reconstitution by buying some of the possible additions around the end of March and selling them near the end of June, concentrating on A- and B-rated stocks.
If you're a longer term investor, the reconstitution might be a great time to pick small-cap A- and B-rated stocks that are also potential index additions. And then use the Schwab Equity Ratings guidance to help determine if you should sell the stocks if their ratings fall to D or F.
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Post by nylefty on Jun 25, 2016 14:00:38 GMT -5
ok Help!!.. How is being part of the Russell microcap a big deal?. Why wasn't MNKD added when MNKD was 6 7 8 or 9 bucks. Is it because now it's only 1.25...? What is the benefit.. exposure..? Isn't part of the NASDAQ considered a bigger deal. have a good weekend. Thanks for any insight. It wasn't added then because a company whose stock is selling for 6,7,8 or 9 bucks has a market cap that is far too large for it to be considered a microcap. And actually "microcap" is usually considered to apply to companies whose market caps are between 50 million and 300 million dollars. MannKind's market cap is currently 597 million dollars so Russell must be basing its decision on that awful time when MannKind's shares were selling for 64 cents. I'm hoping that the next time Russell decides which stocks to add or drop it from its microcap index it will drop MannKind because its market cap will be far too high to be considered a microcap. In other words, it's better to be in the Small Cap indexes. Micro Cap Definition | Investopedia
www.investopedia.com/terms/m/microcapstock.asp
Investopedia
A micro cap is a publicly traded company in the United States that has a market capitalization between approximately $50 million and $300 million. Micro-cap companies have greater market capitalization than nano caps, and less than small, mid, large and mega-cap corporations. |
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Post by nylefty on Jun 25, 2016 14:40:31 GMT -5
This article is about the Russell 2000, which consists of "Small Cap" stocks, not microcaps, which have lower market caps. It's better to be a small cap than a microcap. |
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Post by mnkdfann on Jun 25, 2016 14:41:51 GMT -5
Russell maintains several indices, so MNKD may well have been in one of the others when it had a higher share price.
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