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Post by cjc04 on Aug 9, 2018 13:33:07 GMT -5
Satisfying the Deerfield debt would return MannKind's assets to the company, putting it on much more favorable footing for non-dilutive financing to fund future drug development. Alfred Mann secured $100 million in financing from Deerfield many years ago when MannKind was still a startup biotechnology drug development company and all of the company's intellectual property, patents, technosphere drug candidates, and even the manufacturing facility in Danbury were put up as collateral.
I would think, now that company's Technosphere pulmonary drug delivery technology is proving itself and becoming more valuable, that MannKind will no longer give up 100% of its assets as security for non-dilutive funding (assuming the Deerfield debt is first satisfied) and will selectively choose which assets will be used as security.
For example, if MannKind were to secure financing to fund development of more API, then the rights to the new drugs would serve as collateral but NOT the intellectual property underlying its technology.
With only $23 million principle remaining on the Deerfield Notes (Tranches 1, 4 and B) it's entirely possible for a venture capitalist, investment firm or pharmaceutical company to buy into MannKind, pay off the Deerfield debt and secure intellectual rights to drugs (commercial or development) which it believes have potential to become big revenue-generators. It's a company's assets which give it leverage in the financial markets. As long as Deerfield holds first right to all MannKind's asset, the CFO doesn't have the leverage needed to secure future funding at favorable terms.
It's quite possible that an announcement of an Agreement, where a 'white knight' steps forward to fund MannKind's future, could indeed cause a short squeeze, particularly if it were to provide MannKind with 2 years of runway for expanding commercialization of Afrezza and expanding development of more Techosphere API in its pipeline.
 With all the work they’ve done on the balance sheet, and all the talking they’ve done about it, there’s gotta be some truth to what you’re sayin MN. I’m shocked that the Agedhippie hasn’t chimed in on this yet, but what do you think about the milestone payments he’s been talking about? Is it as easy as paying off the Deerfield debt to get all the collateral back, or do milestone payments factor in as well? Thx |
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Post by babaoriley on Aug 9, 2018 13:45:37 GMT -5
Satisfying the Deerfield debt would return MannKind's assets to the company, putting it on much more favorable footing for non-dilutive financing to fund future drug development. Alfred Mann secured $100 million in financing from Deerfield many years ago when MannKind was still a startup biotechnology drug development company and all of the company's intellectual property, patents, technosphere drug candidates, and even the manufacturing facility in Danbury were put up as collateral.
I would think, now that company's Technosphere pulmonary drug delivery technology is proving itself and becoming more valuable, that MannKind will no longer give up 100% of its assets as security for non-dilutive funding (assuming the Deerfield debt is first satisfied) and will selectively choose which assets will be used as security.
For example, if MannKind were to secure financing to fund development of more API, then the rights to the new drugs would serve as collateral but NOT the intellectual property underlying its technology.
With only $23 million principle remaining on the Deerfield Notes (Tranches 1, 4 and B) it's entirely possible for a venture capitalist, investment firm or pharmaceutical company to buy into MannKind, pay off the Deerfield debt and secure intellectual rights to drugs (commercial or development) which it believes have potential to become big revenue-generators. It's a company's assets which give it leverage in the financial markets. As long as Deerfield holds first right to all MannKind's asset, the CFO doesn't have the leverage needed to secure future funding at favorable terms.
It's quite possible that an announcement of an Agreement, where a 'white knight' steps forward to fund MannKind's future, could indeed cause a short squeeze, particularly if it were to provide MannKind with 2 years of runway for expanding commercialization of Afrezza and expanding development of more Techosphere API in its pipeline.
I have to chime in that I respectfully and somewhat mildly disagree with brother and buddy Holdem on all but the final paragraph (sentence), with which I wholeheartedly agree! |
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Post by casualinvestor on Aug 9, 2018 13:55:05 GMT -5
That's what they said 2007-2009. 666. The fails to deliver report gives a good handle on outstanding naked short shares, with the grand total of all outstanding fails updated daily. The latest report shows that as of July 12, only 63594 shares had not been delivered after a short sale, and in that 2 week period leading up to it, there had been a low of a measly 758 shares outstanding without loaned shares delivered, meaning that there were essentially no naked shorts outstanding at that point. When people talk about "counterfeiting shares" and "distorting the float", it relies on a large number of naked short shares staying undelivered - shares sold to people with no loaned shares to back it up. That just doesn't happen in the case of MNKD. You have short term bobbles up to about 259K shares that quickly get underlying shares delivered within a few days. This out of 140M outstanding shares. Even 1M FTD would represent <1% of outstanding shares, and that has been an extremely rare occurrence which once again gets corrected within days. So if someone executes a naked short, for lets say 10,000 shares at $5.00/share, then 1 days later the SP is $4.00. That day they find 1000 shares to borrow. So 1000 shares are no longer a naked short, but 9000 still are. Then they buy 1000 shares at $4.00, covering those 1000. Now they are only short 9000 shares Can they then repeat that process 9 more times with the same borrowed shares to eventually cover 10,000 shares while only borrowing 1000? If so, what is the time frame this would take? What is number of days of interest they would have to pay before their short position was completely exited? How many people can use the same pool of shares to borrow, to close out a short? I don't think a lot of people have a problem with long-term shorting, or even short-term/day shorting. It's the shenanigans around naked shorting, even when shares are located and they don't hit FTD, that are the problem. When the "days to cover" is 10-20 days, but my shares have been lent out almost continuously since Oct, you have to guess that they are in a pool, and that multiple people are borrowing them to short. To be clear, I don't know the answers to these questions. I don't know the (il)legality of what I'm suggesting, or how often it happens. But my thought games come up with a bunch of ways that naked shorting could be abused. |
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Post by traderdennis on Aug 9, 2018 13:57:46 GMT -5
derek2: I, for one, REALLY appreciate your explanation. I am not sure I completely understand but that is due to my lack of knowledge/learning. I am trying to read up on it. With your explanations and everyone else adding to the posts, I feel I get a great education here. You explaining, Peppy charting and everyone chipping in, it really helps. Note: I got in a while ago when I was told of a great opportunity which I looked up and saw a needed great product to help the world. Also, I thought a great quick opportunity to make some $$. Duh. Anyway, it didn't take off like our Amazon did but I do still think it is on the launch pad and all we need is $omeone with a big match!. Again, THANKS , you all are really appreciated. Keep in mind that many shorts turnover their shares fairly frequently. A lot can happen between reporting periods. As with this last big price drop I'm sure there was a decent number of naked shorts but they bought back in quickly after the nice gain (for them). The fail to deliver report is calculated on a daily basis when released either monthly or twice monthly. And market makers are legally allowed to naked short for liquidity and hedging purposes. |
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Post by standup on Aug 9, 2018 14:01:05 GMT -5
The fails to deliver report gives a good handle on outstanding naked short shares, with the grand total of all outstanding fails updated daily. The latest report shows that as of July 12, only 63594 shares had not been delivered after a short sale, and in that 2 week period leading up to it, there had been a low of a measly 758 shares outstanding without loaned shares delivered, meaning that there were essentially no naked shorts outstanding at that point. When people talk about "counterfeiting shares" and "distorting the float", it relies on a large number of naked short shares staying undelivered - shares sold to people with no loaned shares to back it up. That just doesn't happen in the case of MNKD. You have short term bobbles up to about 259K shares that quickly get underlying shares delivered within a few days. This out of 140M outstanding shares. Even 1M FTD would represent <1% of outstanding shares, and that has been an extremely rare occurrence which once again gets corrected within days. and do the shorts really need to be naked?? I mean, there are plenty of shares to borrow, thanks to all the “loyal” shareholders who’ve been brainwashed into thinking lending them out is such a great opportunity. Are there? That's difficult to know unless you're the one wanting to short shares at that given point in time and the broker has shares to lend or allows the sale with the expectation that your trade will be very short term or they can find the shares to lend elsewhere. |
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Post by standup on Aug 9, 2018 14:11:06 GMT -5
The fails to deliver report gives a good handle on outstanding naked short shares, with the grand total of all outstanding fails updated daily. The latest report shows that as of July 12, only 63594 shares had not been delivered after a short sale, and in that 2 week period leading up to it, there had been a low of a measly 758 shares outstanding without loaned shares delivered, meaning that there were essentially no naked shorts outstanding at that point. When people talk about "counterfeiting shares" and "distorting the float", it relies on a large number of naked short shares staying undelivered - shares sold to people with no loaned shares to back it up. That just doesn't happen in the case of MNKD. You have short term bobbles up to about 259K shares that quickly get underlying shares delivered within a few days. This out of 140M outstanding shares. Even 1M FTD would represent <1% of outstanding shares, and that has been an extremely rare occurrence which once again gets corrected within days. So if someone executes a naked short, for lets say 10,000 shares at $5.00/share, then 1 days later the SP is $4.00. That day they find 1000 shares to borrow. So 1000 shares are no longer a naked short, but 9000 still are. Then they buy 1000 shares at $4.00, covering those 1000. Now they are only short 9000 shares Can they then repeat that process 9 more times with the same borrowed shares to eventually cover 10,000 shares while only borrowing 1000? If so, what is the time frame this would take? What is number of days of interest they would have to pay before their short position was completely exited? How many people can use the same pool of shares to borrow, to close out a short? I don't think a lot of people have a problem with long-term shorting, or even short-term/day shorting. It's the shenanigans around naked shorting, even when shares are located and they don't hit FTD, that are the problem. When the "days to cover" is 10-20 days, but my shares have been lent out almost continuously since Oct, you have to guess that they are in a pool, and that multiple people are borrowing them to short. To be clear, I don't know the answers to these questions. I don't know the (il)legality of what I'm suggesting, or how often it happens. But my thought games come up with a bunch of ways that naked shorting could be abused. My understanding of your scenario is, yes, if 1000 shares are available to short then they could do that and they could buy back, short, buy back forever provided they still had access to 1000 shares. The interest calculation is the same as if you were long on margin. Lending to short is on a one to one basis. The same share cannot be lent out to more than one sale at a time. Otherwise, you could drive the price to near zero by creating an infinite supply of shares. |
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Post by derek2 on Aug 9, 2018 14:36:10 GMT -5
So if someone executes a naked short, for lets say 10,000 shares at $5.00/share, then 1 days later the SP is $4.00. That day they find 1000 shares to borrow. So 1000 shares are no longer a naked short, but 9000 still are. Then they buy 1000 shares at $4.00, covering those 1000. Now they are only short 9000 shares
Can they then repeat that process 9 more times with the same borrowed shares to eventually cover 10,000 shares while only borrowing 1000? If so, what is the time frame this would take?What is number of days of interest they would have to pay before their short position was completely exited? How many people can use the same pool of shares to borrow, to close out a short? I don't think a lot of people have a problem with long-term shorting, or even short-term/day shorting. It's the shenanigans around naked shorting, even when shares are located and they don't hit FTD, that are the problem. When the "days to cover" is 10-20 days, but my shares have been lent out almost continuously since Oct, you have to guess that they are in a pool, and that multiple people are borrowing them to short. To be clear, I don't know the answers to these questions. I don't know the (il)legality of what I'm suggesting, or how often it happens. But my thought games come up with a bunch of ways that naked shorting could be abused. My understanding of your scenario is, yes, if 1000 shares are available to short then they could do that and they could buy back, short, buy back forever provided they still had access to 1000 shares. The interest calculation is the same as if you were long on margin. Lending to short is on a one to one basis. The same share cannot be lent out to more than one sale at a time. Otherwise, you could drive the price to near zero by creating an infinite supply of shares. To avoid getting 2 sets of 1000 mixed up, let's change it to covering 1000 shares and having 2000 shares found for borrowing. The covering 1000 shares (buying) would lower the number of shorted shares to 9000. 2000 shares would still be borrowed in the account, giving 9000-2000=7000 still naked shorted. The 2000 shares borrowed just sit there and don't get counted twice. The brokerage or market maker still has to deal with the other 7000. Your comments around very short-term naked trading are, I think valid, but they work both ways. You can, for example, sell naked puts which is kind of like "naked long exposure" (what a term). Much of this comes from brokerages taking on a bit of risk (naked short exposure) to facilitate making trades for their clients, which is what brokerages make money on. Your comment makes reference to interest charges, etc. All of these fees are what keep the lights on at the brokerage. Also, there are two sides to every coin. Covering those 1000 shares could put upward pressure on the stock price, and you might not be able to buy all of them at the lower price. More importantly, if the share price drops below a price point where many shorts / longs have decided would be a good cover / entry point, a stock's fall can be blunted and even have the price buoyed. Sort of like the opposite of when upward momentum in share price loses steam due to profit taking by longs. |
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Post by derek2 on Aug 9, 2018 14:39:14 GMT -5
And a bit of humor. Longs buy then sell. Shorts sell then buy. Both types of investors do exactly the same things, just in a different order.
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Post by standup on Aug 9, 2018 14:48:01 GMT -5
And a bit of humor. Longs buy then sell. Shorts sell then buy. Both types of investors do exactly the same things, just in a different order. But short selling increases the supply of shares which can have a downward bias on share prices. |
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Post by mnholdem on Aug 9, 2018 17:02:11 GMT -5
My understanding of your scenario is, yes, if 1000 shares are available to short then they could do that and they could buy back, short, buy back forever provided they still had access to 1000 shares. The interest calculation is the same as if you were long on margin. Lending to short is on a one to one basis. The same share cannot be lent out to more than one sale at a time. Otherwise, you could drive the price to near zero by creating an infinite supply of shares. To avoid getting 2 sets of 1000 mixed up, let's change it to covering 1000 shares and having 2000 shares found for borrowing. The covering 1000 shares (buying) would lower the number of shorted shares to 9000. 2000 shares would still be borrowed in the account, giving 9000-2000=7000 still naked shorted. The 2000 shares borrowed just sit there and don't get counted twice. The brokerage or market maker still has to deal with the other 7000. Your comments around very short-term naked trading are, I think valid, but they work both ways. You can, for example, sell naked puts which is kind of like "naked long exposure" (what a term). Much of this comes from brokerages taking on a bit of risk (naked short exposure) to facilitate making trades for their clients, which is what brokerages make money on. Your comment makes reference to interest charges, etc. All of these fees are what keep the lights on at the brokerage. Also, there are two sides to every coin. Covering those 1000 shares could put upward pressure on the stock price, and you might not be able to buy all of them at the lower price. More importantly, if the share price drops below a price point where many shorts / longs have decided would be a good cover / entry point, a stock's fall can be blunted and even have the price buoyed. Sort of like the opposite of when upward momentum in share price loses steam due to profit taking by longs. It doesn't work like that. If ten fund managers find 10,000 shares available at 10am, you effectively have 100,000 (10,000 x 10 shares) available. SEC doesn't mandate real time. |
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Post by traderdennis on Aug 9, 2018 19:01:01 GMT -5
To avoid getting 2 sets of 1000 mixed up, let's change it to covering 1000 shares and having 2000 shares found for borrowing. The covering 1000 shares (buying) would lower the number of shorted shares to 9000. 2000 shares would still be borrowed in the account, giving 9000-2000=7000 still naked shorted. The 2000 shares borrowed just sit there and don't get counted twice. The brokerage or market maker still has to deal with the other 7000. Your comments around very short-term naked trading are, I think valid, but they work both ways. You can, for example, sell naked puts which is kind of like "naked long exposure" (what a term). Much of this comes from brokerages taking on a bit of risk (naked short exposure) to facilitate making trades for their clients, which is what brokerages make money on. Your comment makes reference to interest charges, etc. All of these fees are what keep the lights on at the brokerage. Also, there are two sides to every coin. Covering those 1000 shares could put upward pressure on the stock price, and you might not be able to buy all of them at the lower price. More importantly, if the share price drops below a price point where many shorts / longs have decided would be a good cover / entry point, a stock's fall can be blunted and even have the price buoyed. Sort of like the opposite of when upward momentum in share price loses steam due to profit taking by longs. It doesn't work like that. If ten fund managers find 10,000 shares available at 10am, you effectively have 100,000 (10,000 x 10 shares) available. SEC doesn't mandate real time. And those providing the allocations if they have only 10,000 shares of stock in inventory to lend, can only allow 1 client to have the rights to the 10K. Once the fund returns the shares, then the share lender can reallocate. Naked short happens for two reasons. Market makers need to short during the trading day to provide liquidity or hedge a large option sale. Brokerages can naked short if more than their inventory of shares have puts exercised. This is when Fidelity will raise the interest rate in anticipation of Options Expiration until they have the number of shares to cover the exercised puts. Or the brokerage will purchase shares on the open market to cover the short naked short. |
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Post by standup on Aug 9, 2018 20:48:04 GMT -5
It doesn't work like that. If ten fund managers find 10,000 shares available at 10am, you effectively have 100,000 (10,000 x 10 shares) available. SEC doesn't mandate real time. And those providing the allocations if they have only 10,000 shares of stock in inventory to lend, can only allow 1 client to have the rights to the 10K. Once the fund returns the shares, then the share lender can reallocate. Naked short happens for two reasons. Market makers need to short during the trading day to provide liquidity or hedge a large option sale. Brokerages can naked short if more than their inventory of shares have puts exercised. This is when Fidelity will raise the interest rate in anticipation of Options Expiration until they have the number of shares to cover the exercised puts. Or the brokerage will purchase shares on the open market to cover the short naked short. I'm surprised to hear that but I guess not too surprised. So if 100 investors could borrow the same 10,000 shares that would represent 1M shares short with 990,000 being naked. No wonder a heavily targeted small to mid-cap company's share price has little chance of staying up. |
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Post by traderdennis on Aug 9, 2018 22:50:17 GMT -5
And those providing the allocations if they have only 10,000 shares of stock in inventory to lend, can only allow 1 client to have the rights to the 10K. Once the fund returns the shares, then the share lender can reallocate. Naked short happens for two reasons. Market makers need to short during the trading day to provide liquidity or hedge a large option sale. Brokerages can naked short if more than their inventory of shares have puts exercised. This is when Fidelity will raise the interest rate in anticipation of Options Expiration until they have the number of shares to cover the exercised puts. Or the brokerage will purchase shares on the open market to cover the short naked short. I'm surprised to hear that but I guess not too surprised. So if 100 investors could borrow the same 10,000 shares that would represent 1M shares short with 990,000 being naked. No wonder a heavily targeted small to mid-cap company's share price has little chance of staying up. I never said that 100 different people can borrow the same 10k shares. 1 person can borrow the 10k shares. If you exercise a put then the brokerage would need to locate shares. If they can’t find shares they can close out the exercises outs at the brokerages discretion |
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Post by tmann on Aug 10, 2018 11:06:52 GMT -5
In order for a short squeeze to exist there would have to be some limit to the number of shares short side could sell into the market. As there is no such limitation a short seems up likely. Jay Clayton, current head of the SEC has a lot of experience in the financial markets include a stint a Bain Capital, Mitch Romney's hedge fund. Historically the SEC has taken little action against "naked short selling" and it is one market problem that is dismissed rather than discussed. This is a list of fails to cover. Not it doesn't say who fails to cover. That is not possible. ftp.nasdaqtrader.com/SymbolDirectory/regsho/It doesn't matter. No one has ever been prosecuted anyway. It one of a number of evident criminal problems being addressed in our country right now. |
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