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Post by akemp3000 on Dec 26, 2017 11:20:40 GMT -5
Zacks – December 26, 2017 - Investors in MannKind Corporation MNKD need to pay close attention to the stock based on moves in the options market lately. That is because the Dec 29th, 2017, $3.00 Call had some of the highest implied volatility of all equity options today…Clearly, options traders are pricing in a big move for MannKind Corp shares, but what is the fundamental picture for the company?
This notice is not surprising but what is surprising is the very short time frame.
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Post by Deleted on Dec 26, 2017 12:33:11 GMT -5
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Post by akemp3000 on Dec 26, 2017 12:44:53 GMT -5
The last time Mike C was nearing an important financial point in time, he handled it far better than anyone anticipated. I don't see this debt payment as being extraordinarily significant meaning I expect Mike C already knows how it's going to play out. Do you expect this January 15th debt resolution to be a catalyst event that will move the stock significantly up or down? If so, which direction? BTW, I appreciate all your posts.
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Post by Deleted on Dec 26, 2017 12:53:48 GMT -5
Here is what we know : MannKind will start the year with $46 million which includes the $10 million in escrow for the January 15th payment. MannKind is burning approximately $24 million a quarter. A Deerfield covenant require MannKind to maintain $25 at the end of the quarter.
Assuming MannKind pays Deerfield $10 million from the escrow account, that forces cash to dwindle to $12 by the end of Q1; violating the covenant.
MannKind needs a partnership with substantial upfront $, dilute, or a combination of both.
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Post by agedhippie on Dec 26, 2017 13:12:11 GMT -5
The last time Mike C was nearing an important financial point in time, he handled it far better than anyone anticipated. I don't see this debt payment as being extraordinarily significant meaning I expect Mike C already knows how it's going to play out. Do you expect this January 15th debt resolution to be a catalyst event that will move the stock significantly up or down? If so, which direction? BTW, I appreciate all your posts. The option buyer is betting that the price will be manipulated over the $3.25 cut-off point so his $3.00 calls will be in the money. I'm not certain that is a sure thing - Mike has enough shares on the shelf to settle with Deerfield and swallow the dilution. That said, the Jan 19 $3.00 calls are sitting at 9c and I am seriously tempted to to take a position on a lottery ticket basis - if it came off I would double my money. My guess is that you are seeing others place the same bet. Mannkind need to preserve cash so they want Deerfield to take shares and for that they need the price over $3.25.
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Post by Deleted on Dec 26, 2017 13:19:15 GMT -5
"Mannkind need to preserve cash so they want Deerfield to take shares and for that they need the price over $3.25."
MannKind can offer shares at a price discounted where they are currently trading which is what they have done before. Unfortunately, Deerfield will demand a discount from current price.
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Post by cjm18 on Dec 26, 2017 13:22:09 GMT -5
The max is 4 million shares? Correct? Share price is below 2.50.
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Post by matt on Dec 26, 2017 13:45:34 GMT -5
Option traders rarely buy or sell naked options; they have some other security in the portfolio and use options to hedge a movement one way or another. When you see option volumes spike, even if they seem to be out of the money, they might just be closing out a position to lock in the profit as of today. Few option contracts are ever exercised; most are sold back to the market, or two off-setting contracts are allowed to cancel each other out. When you look at the option market, you only have half the story and there is no way to know what the rest of the story looks like.
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Post by sportsrancho on Dec 26, 2017 13:50:29 GMT -5
Here is what we know : MannKind will start the year with $46 million which includes the $10 million in escrow for the January 15th payment. MannKind is burning approximately $24 million a quarter. A Deerfield covenant require MannKind to maintain $25 at the end of the quarter. Assuming MannKind pays Deerfield $10 million from the escrow account, that forces cash to dwindle to $12 by the end of Q1; violating the covenant. MannKind needs a partnership with substantial upfront $, dilute, or a combination of both. Why wouldn’t they move it again so we would not be in violation of it?
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Post by golfeveryday on Dec 26, 2017 13:58:25 GMT -5
Here is what we know : MannKind will start the year with $46 million which includes the $10 million in escrow for the January 15th payment. MannKind is burning approximately $24 million a quarter. A Deerfield covenant require MannKind to maintain $25 at the end of the quarter. Assuming MannKind pays Deerfield $10 million from the escrow account, that forces cash to dwindle to $12 by the end of Q1; violating the covenant. MannKind needs a partnership with substantial upfront $, dilute, or a combination of both. Why wouldn’t they move it again so we would not be in violation of it? mnkd wants DF to take the shares but needs the price above $3.25 for good. I would assume if DF thinks mnkd can do that within 30-60 daysthey might move it out again?
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Post by akemp3000 on Dec 26, 2017 13:58:31 GMT -5
Here is what we know : MannKind will start the year with $46 million which includes the $10 million in escrow for the January 15th payment. MannKind is burning approximately $24 million a quarter. A Deerfield covenant require MannKind to maintain $25 at the end of the quarter. Assuming MannKind pays Deerfield $10 million from the escrow account, that forces cash to dwindle to $12 by the end of Q1; violating the covenant. MannKind needs a partnership with substantial upfront $, dilute, or a combination of both. Why wouldn’t they move it again so we would not be in violation of it? That's my guess as to how Mike, along with the Mannkind financial partners, will solve this. With all the catalysts for scripts to increase having just recently begun, now's not the time for the big investors to squeeze Mannkind's current path. This is why I was curious as to what option traders are thinking. I really appreciate the feedback in this thread as it provides educational food for thought!
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Post by Deleted on Dec 26, 2017 14:12:30 GMT -5
"Why wouldn’t they move it again so we would not be in violation of it?"
That is up to Deerfield to decide.
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Post by mnkdnewbie on Dec 26, 2017 15:58:37 GMT -5
Wasn't the threshold requirement lowered for cash on hand when they restructured?
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Post by bosephe on Dec 26, 2017 16:26:11 GMT -5
Wasn't the threshold requirement lowered for cash on hand when they restructured? Subject to these conditions, Deerfield has also agreed to amend the terms of the minimum liquidity covenant under the Facility Agreement such that, on the last day of each month through October 31 and on December 31, 2017, MannKind must maintain at least $10 million of Cash and Cash Equivalents (instead of $25 million). Source
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Post by letitride on Dec 26, 2017 19:37:33 GMT -5
I know my acct is full of freshly acquired calls and I would love a reason to trade them before the new year.
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