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Post by centralcoastinvestor on Aug 4, 2018 11:11:13 GMT -5
Let me begin by saying that yesterday sucked. I have lived through many days just like that before with Mnkd stock. And every time, it was the pits. It is never easy watching a bear raid and watching the stock plummet. Did the Mnkd story suddenly change yesterday that caused the stock to drop. As far as I can tell, it hasn’t. Afrezza is life changing and MannKind needs money. Yep same story.
Now, based on the premise of the hit pieces yesterday, the world was coming to an end and MannKind management just discovered that they were short funding. Give me a break. From the moment Mike Castagna volunteered to come over to MannKind, he knew that MannKind was in a dire cash crunch situation. It is why he has spoken about the recapitalization plan at every conference call since he took over as CEO. So the idea that he just figured that out yesterday from all of these hit pieces is ridiculous.
Mike has a complete understanding of the current financial situation. The last thing he is going to allow to happen is for the company to run out of cash just as revenues for Afrezza are setting new records. Could the solution involve a painful dilution to see us through. The answer is yes. Look, I don’t like dilution any more than the next shareholder. But Mike has to do what he needs to do to keep the company moving forward. Some pointed to Mike mentioning in the Thursday meeting that he doesn’t see dilution as being the long term solution for the capital needs of the company. But it may indeed be needed in the short term.
There is still the prospect of obtaining a partnership for TreT. But it is possible that with the current cash crunch, a possible partner may be lowballing an offer. Mike has to make a lot of critical decisions based on things we do not know about. Unfortunately, because none of us know, it provides fertile ground for FUD to be made up and spread. One thing I have learned over the years of owning Mnkd, the shorts are just as committed to their viewpoint as I am to my long view. Thus, it is an ugly war that is being played out. But I do trust that Mike understands the financial situation at MannKind far better than any of us and certainly more than the FUD mongers. Mike and his team are dedicated to making Afrezza and MannKind a success, and that is exactly what I think will happen in the long run.
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Post by boca1girl on Aug 4, 2018 12:24:55 GMT -5
CCI - “There is still the prospect of obtaining a partnership for TreT. But it is possible that with the current cash crunch, a possible partner may be lowballing an offer.”
My thoughts exactly. Mike made reference to the potential value of TreT based on the Liquida IPO, when he was talking about how undervalued MNKD is currently.
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Post by nadathing on Aug 4, 2018 13:36:09 GMT -5
CCI: Great post. I also think Mike is doing a great job considering the mess he was left. I can't imaging many who would step up to the plate and try to fix this company. Dilution is no doubt going to happen and may take another toll on the pathetic share price. I have no reason to bail at this point. I'm down 90% and about $130,000. May as well just let the cards fall where they may. Hope for the best but acknowledge we are in a dire situation.
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Post by tomtabb on Aug 4, 2018 14:10:25 GMT -5
I think everyone understands the current financial situation. What isn't apparent is whether anyone understands how to get out of it without destroying the price of the stock.
While I'm here, I may as well ask if anyone knows where MNKD stands with regards to the amount of stock that can be issued under current rules? I recall someone explaining some obtuse rule NASDAQ had about limiting the percent of stock in some fashion.
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Post by matt on Aug 4, 2018 14:54:46 GMT -5
I think everyone understands the current financial situation. What isn't apparent is whether anyone understands how to get out of it without destroying the price of the stock. While I'm here, I may as well ask if anyone knows where MNKD stands with regards to the amount of stock that can be issued under current rules? I recall someone explaining some obtuse rule NASDAQ had about limiting the percent of stock in some fashion. The rule limits issuance of more than 20% of the outstanding shares at a discount in any six month period without shareholder approval. As of March 31, the number of shares outstanding was 126 million which means a limit of 25.2 million new shares. In early April the company issued 14 million shares and in July they issued 7 million to Deerfield in exchange for some debt. I believe both of those issuances would be considered having been made at a discount, which is why the warrants attached to the April offering had to have a six month waiting period or else they would have had the potential to trigger the 20% rule in combination with the original issuance. Since the company has issued 14+7 million shares since March 31, that leaves about 4 million that can be issued at a discount before October, and that clearly is not enough. Shares issued under the ATM are not considered issued at a discount so there is no limit there except for the authorized share limit. NASDAQ can waive application of the 20% rule is special circumstances, but I am not clear on what those circumstances would include. The penalty for issuing too many shares is delisting from NASDAQ, again subject to the discretion of the NASDAQ listing panel. Similarly, since the rule states "without shareholder approval" there is no limit to the shares that can be issued if the company calls a special meeting and a vote by shareholders to authorize such an action. However, it takes a minimum of 21 days to call a special meeting and solicit proxies and THEN the shares can be sold. So there are a bunch of dominos that have to fall in the right sequence in the coming eight weeks and there is not a lot of wiggle room in that schedule. If Mike truly has a non-dilutive funding rabbit to pull out of the proverbial hat, now is the time to do it. |
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Post by cjm18 on Aug 4, 2018 15:08:05 GMT -5
I think everyone understands the current financial situation. What isn't apparent is whether anyone understands how to get out of it without destroying the price of the stock. While I'm here, I may as well ask if anyone knows where MNKD stands with regards to the amount of stock that can be issued under current rules? I recall someone explaining some obtuse rule NASDAQ had about limiting the percent of stock in some fashion. The rule limits issuance of more than 20% of the outstanding shares at a discount in any six month period without shareholder approval. As of March 31, the number of shares outstanding was 126 million which means a limit of 25.2 million new shares. In early April the company issued 14 million shares and in July they issued 7 million to Deerfield in exchange for some debt. I believe both of those issuances would be considered having been made at a discount, which is why the warrants attached to the April offering had to have a six month waiting period or else they would have had the potential to trigger the 20% rule in combination with the original issuance. Since the company has issued 14+7 million shares since March 31, that leaves about 4 million that can be issued at a discount before October, and that clearly is not enough. Shares issued under the ATM are not considered issued at a discount so there is no limit there except for the authorized share limit. NASDAQ can waive application of the 20% rule is special circumstances, but I am not clear on what those circumstances would include. The penalty for issuing too many shares is delisting from NASDAQ, again subject to the discretion of the NASDAQ listing panel. Similarly, since the rule states "without shareholder approval" there is no limit to the shares that can be issued if the company calls a special meeting and a vote by shareholders to authorize such an action. However, it takes a minimum of 21 days to call a special meeting and solicit proxies and THEN the shares can be sold. So there are a bunch of dominos that have to fall in the right sequence in the coming eight weeks and there is not a lot of wiggle room in that schedule. If Mike truly has a non-dilutive funding rabbit to pull out of the proverbial hat, now is the time to do it. Great info. Are we sure the Deerfield shares for equity was at a discount? |
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Post by mytakeonit on Aug 4, 2018 15:18:54 GMT -5
And in the wings ... we have the Mann Group taking care of us.
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Post by matt on Aug 4, 2018 15:41:01 GMT -5
Great info. Are we sure the Deerfield shares for equity was at a discount? I can't be 100% sure how the NASDAQ would look at that transaction, so no. However, I have dealt extensively with the Listing Qualifications Panel and they are a pretty tough crowd, not the sort you would want to have a beer with. It could be that Deerfield had enough of a heads up on the transaction that they were able to short the shares and deliver the new shares to close out the short, which is economically equivalent to shares issued at a discount to market, but I think NASDAQ would see through that. Even so, that would only give an extra 7 million shares to play with and that is only enough to cover the burn for about a month. Either Mike has a non-dilutive deal ready to close (I would assign an ultra-low probability to that), the company will have to get a waiver from NASDAQ, or else the company has to go back to the shareholders for authorization. The problem with getting shareholder authorization is that it would be tantamount to standing on the corner of Broad and Wall Streets with a bullhorn announcing that there will be a big dilutive financing, with the attendant effects on the stock price. Another option is to simply issue the shares, get spanked for violating the 20% rule, and accept a transfer to the OTCBB. It is not illegal to issue more than 20% of the shares at a discount; it is a violation of NASDAQ listing rules. However, there are a lot of index funds and others that are only allowed to own shares listed on a "national securities exchange" and NASDAQ is considered such an exchange, but OTCBB is not. Those shares would hit the market as the funds are forced to divest their holdings and that would not be positive for the share price, but it is not the end of the world either. The only other options involve loan sharks or courtrooms. Both are to be avoided at all costs. |
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Post by mnkdfann on Aug 4, 2018 16:02:24 GMT -5
Does Mike understand the situation? I would hope so. But Mike and his team also just badly blew the earnings guidance they reiterated about a month ago. Sort of hard to reconcile these two things, without concluding that something (either his understanding or his sincerity) is a little off. YMMV.
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Post by agedhippie on Aug 4, 2018 16:50:36 GMT -5
I can't be 100% sure how the NASDAQ would look at that transaction, so no. However, I have dealt extensively with the Listing Qualifications Panel and they are a pretty tough crowd, not the sort you would want to have a beer with. It could be that Deerfield had enough of a heads up on the transaction that they were able to short the shares and deliver the new shares to close out the short, which is economically equivalent to shares issued at a discount to market, but I think NASDAQ would see through that. Even so, that would only give an extra 7 million shares to play with and that is only enough to cover the burn for about a month. Either Mike has a non-dilutive deal ready to close (I would assign an ultra-low probability to that), the company will have to get a waiver from NASDAQ, or else the company has to go back to the shareholders for authorization. The problem with getting shareholder authorization is that it would be tantamount to standing on the corner of Broad and Wall Streets with a bullhorn announcing that there will be a big dilutive financing, with the attendant effects on the stock price. Another option is to simply issue the shares, get spanked for violating the 20% rule, and accept a transfer to the OTCBB. It is not illegal to issue more than 20% of the shares at a discount; it is a violation of NASDAQ listing rules. However, there are a lot of index funds and others that are only allowed to own shares listed on a "national securities exchange" and NASDAQ is considered such an exchange, but OTCBB is not. Those shares would hit the market as the funds are forced to divest their holdings and that would not be positive for the share price, but it is not the end of the world either. The only other options involve loan sharks or courtrooms. Both are to be avoided at all costs. “Either Mike has a non-dilutive deal ready to close (I would assign an ultra-low probability to that)...” Interesting words matt. So “you WOULD assign...” indicates you have not and implies you do not hold a financial position in MNKD, is that correct? If so, what is your position? In other words do you work for another pharmaceutical or biotech company, or know someone that has a financial interest in MNKD or wants one or more of it’s products; or are you following and posting here to just be altruistic? If that was me the phrasing "I would assign..." would mean that "I believe...". I think that is a fairly common turn of speech. I also thought Matt worked in biotech, but not in competition with MNKD. Personally I find his posts interesting because they are made, what looks like to me at least, an informed point of view. You have a combination of an earnings target reduction and a cash flow crunch, it's an awful position to be in when you need to raise money. The only options I see is a loan from Deerfield (or similar company), or a raise and dilution. Since they have us over a barrel it will not be good. The only other thing I could see is a sale and that would be the end of everything. At this point it is about survival. That's easy for me to say because all I have is some Calls at risk, but until sales improve Mannkind will continue to live from hand to mouth. What do I know though, I thought we were going to get a solid base at $1.60 and trade in a channel but no such luck. |
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Post by joeypotsandpans on Aug 4, 2018 17:25:05 GMT -5
Let me begin by saying that yesterday sucked. I have lived through many days just like that before with Mnkd stock. And every time, it was the pits. It is never easy watching a bear raid and watching the stock plummet. Did the Mnkd story suddenly change yesterday that caused the stock to drop. As far as I can tell, it hasn’t. Afrezza is life changing and MannKind needs money. Yep same story. Now, based on the premise of the hit pieces yesterday, the world was coming to an end and MannKind management just discovered that they were short funding. Give me a break. From the moment Mike Castagna volunteered to come over to MannKind, he knew that MannKind was in a dire cash crunch situation. It is why he has spoken about the recapitalization plan at every conference call since he took over as CEO. So the idea that he just figured that out yesterday from all of these hit pieces is ridiculous. Mike has a complete understanding of the current financial situation. The last thing he is going to allow to happen is for the company to run out of cash just as revenues for Afrezza are setting new records. Could the solution involve a painful dilution to see us through. The answer is yes. Look, I don’t like dilution any more than the next shareholder. But Mike has to do what he needs to do to keep the company moving forward. Some pointed to Mike mentioning in the Thursday meeting that he doesn’t see dilution as being the long term solution for the capital needs of the company. But it may indeed be needed in the short term. There is still the prospect of obtaining a partnership for TreT. But it is possible that with the current cash crunch, a possible partner may be lowballing an offer. Mike has to make a lot of critical decisions based on things we do not know about. Unfortunately, because none of us know, it provides fertile ground for FUD to be made up and spread. One thing I have learned over the years of owning Mnkd, the shorts are just as committed to their viewpoint as I am to my long view. Thus, it is an ugly war that is being played out. But I do trust that Mike understands the financial situation at MannKind far better than any of us and certainly more than the FUD mongers. Mike and his team are dedicated to making Afrezza and MannKind a success, and that is exactly what I think will happen in the long run. Depends on your perspective, yesterday did not suck and yes Mike has a complete understanding of the current financial situation along with the situation in the beautiful chart below  I think Mike understands the situation as do many others looks like a "double top" (refills) is about to get broken through along with a steadily rising revenue stream  |
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Post by sportsrancho on Aug 4, 2018 19:46:45 GMT -5
And some of the same posters are over posting in Spencer’s comment section. One even said this that this was better than any reality TV show he had ever seen, and that he’s got the popcorn out ..clearly the lines are drawn in the sand but nobody sees the cards that Mike holds in his hands:-)
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Post by sweedee79 on Aug 4, 2018 20:34:35 GMT -5
@sportsrancho .. I so wish I could see Mike's cards ..
I was on the road all day yesterday .. when I got to my destination checked the pps.. couldn't believe the drop.. this is so difficult and is an obvious attack on the company .. I'm just so angry ..
Why does it have to be so hard to bring a superior insulin to market .. ?? It's just not right ..
We better have something good.. cuz it's time to get out the boxing gloves. I wouldn't mind a pair of my own right now..
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Post by mytakeonit on Aug 4, 2018 20:44:38 GMT -5
Mike has the cards ... but these jokers are running wild. Too bad they didn't read the rules and don't know that jokers are not allowed in this game. www.youtube.com/watch?v=kn481KcjvMo |
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Post by sportsrancho on Aug 4, 2018 20:52:12 GMT -5
@sportsrancho .. I so wish I could see Mike's cards .. I was on the road all day yesterday .. when I got to my destination checked the pps.. couldn't believe the drop.. this is so difficult and is an obvious attack on the company .. I'm just so angry .. Why does it have to be so hard to bring a superior insulin to market .. ?? It's just not right .. We better have something good.. cuz it's time to get out the boxing gloves. I wouldn't mind a pair of my own right now.. I know, I agree, me too! I just wrote Mike a tweet under his tweet telling him that it’s been hard and we are getting beat up pretty bad, but we have his back, that he should just do whatever he has to do. Get it done because I want to see those kids on Afrezza! |
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