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Post by rockstarrick on Dec 11, 2018 7:19:09 GMT -5
Something changed with the fully paid lending program quite some time ago. Short interest has consistently gone up, while the % paid for lending shares has hit rock bottom. For some reason, loaned shares aren’t worth what they used to be. I noted it, and commented on it here when the interest paid started dropping. I just don’t understand short interest going up, and % paid for loaned shares going down. For some unknown reason, I don’t think we’ll be seeing the high interest rates, (40%to50+%), ever again with mnkd. And how/why did it even happen ?? Just all the sudden, bang, the door closed and the % rate dropped ? and there’s more shares than ever shorted. 😎 It happened because the PPS was artificially pumped up to the offering price. People in the know were willing to pay ridiculously high loan rates because they knew the PPS would drop huge after the offering hit the market. You’re missing my point, I’m not questioning why the SI is so high, The % paid to loan shares, used to be 20, 30, 40, 50%, regardless of the SP, or any offering. Then suddenly, the % paid dropped to 5% and stalled. And I don’t think 4 Billion is a stretch for a Company with an FDA approved drug, and drug delivery device. pps artificially pumped up to WHAT offering price ?? |
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Post by xanet on Dec 11, 2018 9:52:26 GMT -5
It happened because the PPS was artificially pumped up to the offering price. People in the know were willing to pay ridiculously high loan rates because they knew the PPS would drop huge after the offering hit the market. You’re missing my point, I’m not questioning why the SI is so high, The % paid to loan shares, used to be 20, 30, 40, 50%, regardless of the SP, or any offering. Then suddenly, the % paid dropped to 5% and stalled. And I don’t think 4 Billion is a stretch for a Company with an FDA approved drug, and drug delivery device. pps artificially pumped up to WHAT offering price ?? Didn't % paid drop after the PIPE offering? I was under the impression that there are just more shares available now. |
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Post by lennymnkd on Dec 11, 2018 9:59:28 GMT -5
Pfizer downgraded , maybe mnkd can help 😀
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Post by rockstarrick on Dec 11, 2018 10:33:40 GMT -5
You’re missing my point, I’m not questioning why the SI is so high, The % paid to loan shares, used to be 20, 30, 40, 50%, regardless of the SP, or any offering. Then suddenly, the % paid dropped to 5% and stalled. And I don’t think 4 Billion is a stretch for a Company with an FDA approved drug, and drug delivery device. pps artificially pumped up to WHAT offering price ?? Didn't % paid drop after the PIPE offering? I was under the impression that there are just more shares available now. I’m not sure why it dropped, but it was incredibly high for many years, regardless. It seemed to drop a little each time Deerfield converted debt to equity. I haven’t checked to see what it did when the AMF sold, but for some reason, it’s down with record short interest. It means nothing to me, other than something, (% paid) that was constantly over 10% for years, is now at 5% with record short interest. Im just not familiar with the program, and factors that make the % go up or down, but the up trigger seems broken. |
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Post by awesomo on Dec 11, 2018 11:44:53 GMT -5
It only reached those super high loan rates right before the offering at $6 hit. And yeah, there’s a lot more shares available to loan because of Deerfield and these share offerings so even though the absolute number of short interest is higher, the supply is much higher.
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Post by traderdennis on Dec 11, 2018 12:13:19 GMT -5
Something changed with the fully paid lending program quite some time ago. Short interest has consistently gone up, while the % paid for lending shares has hit rock bottom. For some reason, loaned shares aren’t worth what they used to be. I noted it, and commented on it here when the interest paid started dropping. I just don’t understand short interest going up, and % paid for loaned shares going down. For some unknown reason, I don’t think we’ll be seeing the high interest rates, (40%to50+%), ever again with mnkd. And how/why did it even happen ?? Just all the sudden, bang, the door closed and the % rate dropped ? and there’s more shares than ever shorted. 😎 It happened because the PPS was artificially pumped up to the offering price. People in the know were willing to pay ridiculously high loan rates because they knew the PPS would drop huge after the offering hit the market. The number of shares short is not able to keep pace with the additional number of authorized shares created (dilution), hence lower interest rates paid on short shares. |
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Post by traderdennis on Dec 11, 2018 12:17:26 GMT -5
Didn't % paid drop after the PIPE offering? I was under the impression that there are just more shares available now. I’m not sure why it dropped, but it was incredibly high for many years, regardless. It seemed to drop a little each time Deerfield converted debt to equity. I haven’t checked to see what it did when the AMF sold, but for some reason, it’s down with record short interest. It means nothing to me, other than something, (% paid) that was constantly over 10% for years, is now at 5% with record short interest. Im just not familiar with the program, and factors that make the % go up or down, but the up trigger seems broken. rockstar, if you look at short shares / total authorized shares, short interest is not even near a record amount. Now with AMF not holding shares all shares are shortable, not the case in 2014. |
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Post by rockstarrick on Dec 11, 2018 21:21:40 GMT -5
It only reached those super high loan rates right before the offering at $6 hit. And yeah, there’s a lot more shares available to loan because of Deerfield and these share offerings so even though the absolute number of short interest is higher, the supply is much higher. It may have also been high before the offering @ $6, but I can tell you, interest paid for loaning shares has been high, (I’ll call over 10% high) for years. I recall several people with loads of shares, receiving incredible monthly interest payments as far back as 2014. The fully paid lending program at Fidelity was paying “high” interest to those loaning shares all the way back to fda approval. I believe short interest at that time was near 70 million shares. Shorts were paying out the a$$ to borrow mnkd shares, and I have no idea how much, but Im thinking millions of dollars were made by heavy hitting shareholders loaning out huge positions for shorting. And this was when our outstanding shares were near 500 million !! There aren’t more shares now. Right ?? Then, for some reason, it just stopped. Kind of like when Forest Gump quit running. And that’s all I got to say about that right there. 😎 |
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Post by jred on Dec 12, 2018 12:01:43 GMT -5
No way to know all the factors that have caused the drop in short interest rebate being paid out, but there are a few observable pieces we can point to (a number of which are already mentioned in this thread)
- first off we have to factor in the 1 for 5 reverse stock split that MNKD did in Mar 2017 when comparing numbers. All numbers I'm using are approximates and any from pre Mar 2017 are adjusted for the split
- Around the end of 2014 MNKD had about 80 million shares outstanding (again adjusted to today's terms) and about 16 million in short interest - So about 20% of total shares.
- Of those 80 million shares outstanding only about 50 million made up the equity float (ie shares available for trading). The other 30 million were either restricted or held by insiders - guessing the bulk of which was the Mann Group and the Mann Living Trust.
- So the 16 million short shares was about 32% of the float
- During the price drop of 2015 (from $28 to $7 - again in today's terms) the shorts piled in to raise total short shares to a high of just over 25 million shares. This represented 46% of the total available float.
- General rule of thumb (there are always exceptions) the market can generally handle a short interest level in the 25% range of equity float. Over 30% and things start to get tricky and over 40% would be one of the more extreme cases on the Street and command significant rebates paid to longs.
- Fast forward to today and MNKD has approx 160 million shares outstanding (painful to type that one, but imo necessary). Most all of the previously restricted shares have been released into the market either through reclassifying or liquidation, so now the equity float is virtually equal to the outstanding share count (157.5 vs 159.6) With a short interest of 42.5 million (thanks sla55 ) that's 27% of the float - still on the higher side, but generally manageable by the stock loan departments.
- As MNKD has been added to a number of indexes (especially the Russell 2000) the MNKD shares held by the Blackrocks, Vanguards and State Streets of the world have more than doubled. They are very stable and efficient lenders of the shares that make up the indexes they offer, so where possible short sellers look to use borrows from them.
- And last one I can think of ... the price has been "relatively" stable and there haven't been major catalysts to cause a churn of ownership. Stock borrows are based on settled shares so if there is a large turnover in long holders (ie added to an index or major price swings), the short seller (or their clearing house) will have to go out into the market place and secure another locate at the same time other shorts are doing the same thing. This action tends to drive up borrow rates. And if the catalyst continues (like major price swings) the rate can stay at high levels.
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Post by traderdennis on Dec 12, 2018 13:22:05 GMT -5
No way to know all the factors that have caused the drop in short interest rebate being paid out, but there are a few observable pieces we can point to (a number of which are already mentioned in this thread)
- first off we have to factor in the 1 for 5 reverse stock split that MNKD did in Mar 2017 when comparing numbers. All numbers I'm using are approximates and any from pre Mar 2017 are adjusted for the split
- Around the end of 2014 MNKD had about 80 million shares outstanding (again adjusted to today's terms) and about 16 million in short interest - So about 20% of total shares.
- Of those 80 million shares outstanding only about 50 million made up the equity float (ie shares available for trading). The other 30 million were either restricted or held by insiders - guessing the bulk of which was the Mann Group and the Mann Living Trust.
- So the 16 million short shares was about 32% of the float
- During the price drop of 2015 (from $28 to $7 - again in today's terms) the shorts piled in to raise total short shares to a high of just over 25 million shares. This represented 46% of the total available float.
- General rule of thumb (there are always exceptions) the market can generally handle a short interest level in the 25% range of equity float. Over 30% and things start to get tricky and over 40% would be one of the more extreme cases on the Street and command significant rebates paid to longs.
- Fast forward to today and MNKD has approx 160 million shares outstanding (painful to type that one, but imo necessary). Most all of the previously restricted shares have been released into the market either through reclassifying or liquidation, so now the equity float is virtually equal to the outstanding share count (157.5 vs 159.6) With a short interest of 42.5 million (thanks sla55 ) that's 27% of the float - still on the higher side, but generally manageable by the stock loan departments.
- As MNKD has been added to a number of indexes (especially the Russell 2000) the MNKD shares held by the Blackrocks, Vanguards and State Streets of the world have more than doubled. They are very stable and efficient lenders of the shares that make up the indexes they offer, so where possible short sellers look to use borrows from them.
- And last one I can think of ... the price has been "relatively" stable and there haven't been major catalysts to cause a churn of ownership. Stock borrows are based on settled shares so if there is a large turnover in long holders (ie added to an index or major price swings), the short seller (or their clearing house) will have to go out into the market place and secure another locate at the same time other shorts are doing the same thing. This action tends to drive up borrow rates. And if the catalyst continues (like major price swings) the rate can stay at high levels.
Jred, let me add one more point that your thorough and detailed analysis. In the past the rate would spike prior to the exercise of monthly options. There would be large numbers of options that could exercise and the brokerages would be seeking shares to lend to cover the new short shares so they are not "naked" shorts. For December there are only a few thousand shares that are in the money so no need to start to boost the rate. Also January is only looking at about 1.5 Million shares, so possibly the rate may spike a bit and then come down after option expiration. There has been more activity on the calls (I suspect option writers shorting calls with MM taking the long side of the transaction) |
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Post by rockstarrick on Dec 12, 2018 15:51:25 GMT -5
No way to know all the factors that have caused the drop in short interest rebate being paid out, but there are a few observable pieces we can point to (a number of which are already mentioned in this thread)
- first off we have to factor in the 1 for 5 reverse stock split that MNKD did in Mar 2017 when comparing numbers. All numbers I'm using are approximates and any from pre Mar 2017 are adjusted for the split
- Around the end of 2014 MNKD had about 80 million shares outstanding (again adjusted to today's terms) and about 16 million in short interest - So about 20% of total shares..
- Of those 80 million shares outstanding only about 50 million made up the equity float (ie shares available for trading). The other 30 million were either restricted or held by insiders - guessing the bulk of which was the Mann Group and the Mann Living Trust.
- So the 16 million short shares was about 32% of the float
- During the price drop of 2015 (from $28 to $7 - again in today's terms) the shorts piled in to raise total short shares to a high of just over 25 million shares. This represented 46% of the total available float.
- General rule of thumb (there are always exceptions) the market can generally handle a short interest level in the 25% range of equity float. Over 30% and things start to get tricky and over 40% would be one of the more extreme cases on the Street and command significant rebates paid to longs.
- Fast forward to today and MNKD has approx 160 million shares outstanding (painful to type that one, but imo necessary). Most all of the previously restricted shares have been released into the market either through reclassifying or liquidation, so now the equity float is virtually equal to the outstanding share count (157.5 vs 159.6) With a short interest of 42.5 million (thanks sla55 ) that's 27% of the float - still on the higher side, but generally manageable by the stock loan departments.
- As MNKD has been added to a number of indexes (especially the Russell 2000) the MNKD shares held by the Blackrocks, Vanguards and State Streets of the world have more than doubled. They are very stable and efficient lenders of the shares that make up the indexes they offer, so where possible short sellers look to use borrows from them.
- And last one I can think of ... the price has been "relatively" stable and there haven't been major catalysts to cause a churn of ownership. Stock borrows are based on settled shares so if there is a large turnover in long holders (ie added to an index or major price swings), the short seller (or their clearing house) will have to go out into the market place and secure another locate at the same time other shorts are doing the same thing. This action tends to drive up borrow rates. And if the catalyst continues (like major price swings) the rate can stay at high levels.
Jred, let me add one more point that your thorough and detailed analysis. In the past the rate would spike prior to the exercise of monthly options. There would be large numbers of options that could exercise and the brokerages would be seeking shares to lend to cover the new short shares so they are not "naked" shorts. For December there are only a few thousand shares that are in the money so no need to start to boost the rate. Also January is only looking at about 1.5 Million shares, so possibly the rate may spike a bit and then come down after option expiration. There has been more activity on the calls (I suspect option writers shorting calls with MM taking the long side of the transaction) Thanks to both of you for the explanation. So, the rate drops as availability increases. I guess the thing that confuses me, is the fact that as availability increases, and the % to borrow goes down, shares that were loaned at higher interest aren’t returned. |
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Post by boca1girl on Dec 12, 2018 20:22:11 GMT -5
Jred, let me add one more point that your thorough and detailed analysis. In the past the rate would spike prior to the exercise of monthly options. There would be large numbers of options that could exercise and the brokerages would be seeking shares to lend to cover the new short shares so they are not "naked" shorts. For December there are only a few thousand shares that are in the money so no need to start to boost the rate. Also January is only looking at about 1.5 Million shares, so possibly the rate may spike a bit and then come down after option expiration. There has been more activity on the calls (I suspect option writers shorting calls with MM taking the long side of the transaction) Thanks to both of you for the explanation. So, the rate drops as availability increases. I guess the thing that confuses me, is the fact that as availability increases, and the % to borrow goes down, shares that were loaned at higher interest aren’t returned. The rate goes up/down on a day to day basis for both parties, the person who lends and the person who borrows. No need to return shares for rate adjustment. |
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Post by peppy on Dec 17, 2018 18:22:24 GMT -5
MNKD Nasdaq real time volume, 1,123,122 shares. MNKD Nasdaq summary volume, 1,985,638 shares. MNKD $1.70 +0.02. +1.19% www.nasdaq.com/symbol/mnkdvolume increased today. |
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Post by peppy on Dec 19, 2018 11:22:21 GMT -5
MNKD price popped out of a wedge, that targets $1.84
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Post by boca1girl on Dec 19, 2018 17:21:07 GMT -5
So much for popping out of the wedge.
What is it called when you drop 20% in a day?
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