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Post by patten1962 on Jan 4, 2019 13:43:56 GMT -5
Don’t think I would know the real reason. But one outcome of the pricing of the new warrants was to almost ensure (in the absence of any extraordinary news like a new RLS molecule which puts mnkd in the Cannibus space) that the old warrants will not get exercised, which it also looked like would not happen anyway. The new warrants have a much better chance of being exercised and will not take such an extraordinary event as RLS example referenced above. In fact Brazil approval might trigger new warrants or certainly Uthr approval of second molecule now in development. Also new warrants have a longer window to exercise allowing for more time to develop newsworthy event or even just see enough script/revenue growth over next 12 months to drive share price up. Thank you
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Post by awesomo on Jan 4, 2019 13:47:14 GMT -5
Yes I believe MC confirmed. Help me understand. Is it possible Mannkind aka Mile C did this Christmas deal because they wanted the stock price to tank so the $2.34 Warrants will not get exercised? No way, they likely did the deal because they saw that the $2.34 warrants weren't going to be exercised.
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Post by patten1962 on Jan 4, 2019 13:55:05 GMT -5
Help me understand. Is it possible Mannkind aka Mile C did this Christmas deal because they wanted the stock price to tank so the $2.34 Warrants will not get exercised? No way, they likely did the deal because they saw that the $2.34 warrants weren't going to be exercised. Ok, I will expose myself a little on my lack of knowledge on Warrants. If they don't get exercised and Mannkind does not get the Money, they get those shares back. Is this not a good thing? Rooks is always telling me Warrents are Toxic? I have tried to educate myself on Warrants but it does confuse me a little.
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Post by mannmade on Jan 4, 2019 13:58:57 GMT -5
Help me understand. Is it possible Mannkind aka Mile C did this Christmas deal because they wanted the stock price to tank so the $2.34 Warrants will not get exercised? No way, they likely did the deal because they saw that the $2.34 warrants weren't going to be exercised. if you read my response I said just that. The new warrants were likely a repricing of the old in effect.
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Post by awesomo on Jan 4, 2019 14:02:25 GMT -5
No way, they likely did the deal because they saw that the $2.34 warrants weren't going to be exercised. Ok, I will expose myself a little on my lack of knowledge on Warrants. If they don't get exercised and Mannkind does not get the Money, they get those shares back. Is this not a good thing? Rooks is always telling me Warrents are Toxic? I have tried to educate myself on Warrants but it does confuse me a little. Yes, the shares go back into the pot. However, Mike was clearly counting on the money from those $2.34 warrants to provide sufficient runway for operations in 2019. Since that money was very much in danger of never materializing, he was forced into a much worse offering with new warrants issued at a much lower price ($1.60). In general, warrants are toxic because the warrant holders have free reign to manipulate/short the stock to guarantee themselves profits. So for example, if I hold a $1.60 warrant and the price jumps to $2.00+, I can safely short the stock because worst case scenario, I can just exercise my warrants and buy those shares for $1.60 even if the price goes much higher. The more likely scenario is I can keep the cycle of shorting and covering over and over again until the warrants expire. This is exactly how hedge funds operate, they are all about arbitrage opportunities and they don't give a damn about how much it hurts the underlying companies and their shareholders.
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Post by mannmade on Jan 4, 2019 14:04:55 GMT -5
I am not an expert in warrants but during their term or window they tend to put a cap on share price and allow the holders to short the stock in the absence of any extraordinarily good news. And even then when it is a one time event the share price can and often goes back down. Mnkd’s real issue is lack of significant revenue and has not yet reach a minimum growth trend that WS thinks would be worthy of factoring into the share price at this time imho.
Let’s see what 2019 brings in this area. Which is one of reason why o understand mnkd is seeking to beef up their media/television presence. Also it may have an added benefit of creating awareness among WS KOL’’s.
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Post by patten1962 on Jan 4, 2019 14:14:26 GMT -5
Ok, I will expose myself a little on my lack of knowledge on Warrants. If they don't get exercised and Mannkind does not get the Money, they get those shares back. Is this not a good thing? Rooks is always telling me Warrents are Toxic? I have tried to educate myself on Warrants but it does confuse me a little. Yes, the shares go back into the pot. However, Mike was clearly counting on the money from those $2.34 warrants to provide sufficient runway for operations in 2019. Since that money was very much in danger of never materializing, he was forced into a much worse offering with new warrants issued at a much lower price ($1.60). In general, warrants are toxic because the warrant holders have free reign to manipulate/short the stock to guarantee themselves profits. So for example, if I hold a $1.60 warrant and the price jumps to $2.00+, I can safely short the stock because worst case scenario, I can just exercise my warrants and buy those shares for $1.60 even if the price goes much higher. The more likely scenario is I can keep the cycle of shorting and covering over and over again until the warrants expire. This is exactly how hedge funds operate, they are all about arbitrage opportunities and they don't give a damn about how much it hurts the underlying companies and their shareholders. Thank you. Get it a little better but will need to read your reply 20 or 30 more times.
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Post by morfu on Jan 4, 2019 14:28:01 GMT -5
No way, they likely did the deal because they saw that the $2.34 warrants weren't going to be exercised. if you read my response I said just that. The new warrants were likely a repricing of the old in effect. hmm.. so while at risk of not giving away 10% of the company for 2.38$, the decision was to give away 20% of the company for 1.50 and 1.60$.. without any current need for money! So in total this last decisions might mean that 30$ of the company was given away for something like 80mil$..
And again, why is there a need for securing money for the next 18months right now?
Its not like we have a solid streak in rising product sales doubling every year (which would mean for example 12month from now would be a much better option to give shares away..) Or why not giving shares away at all, but make another Deerfield deal? Any delay not costing 30% of the company shares would be a better one!
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Post by boca1girl on Jan 4, 2019 15:31:21 GMT -5
if you read my response I said just that. The new warrants were likely a repricing of the old in effect. hmm.. so while at risk of not giving away 10% of the company for 2.38$, the decision was to give away 20% of the company for 1.50 and 1.60$.. without any current need for money! So in total this last decisions might mean that 30$ of the company was given away for something like 80mil$..
And again, why is there a need for securing money for the next 18months right now?
Its not like we have a solid streak in rising product sales doubling every year (which would mean for example 12month from now would be a much better option to give shares away..) Or why not giving shares away at all, but make another Deerfield deal? Any delay not costing 30% of the company shares would be a better one!
Risk management. They would have rather had the $2.38 warrants exercise by April but that didn’t look likely. There was a lot of noise on wall street that credit markets might freeze up. I’m not happy with $1.50/$1.60 but they wanted to make sure they had the money for the ad campaign.
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Post by morfu on Jan 4, 2019 15:48:07 GMT -5
hmm.. so while at risk of not giving away 10% of the company for 2.38$, the decision was to give away 20% of the company for 1.50 and 1.60$.. without any current need for money! So in total this last decisions might mean that 30$ of the company was given away for something like 80mil$..
And again, why is there a need for securing money for the next 18months right now?
Its not like we have a solid streak in rising product sales doubling every year (which would mean for example 12month from now would be a much better option to give shares away..) Or why not giving shares away at all, but make another Deerfield deal? Any delay not costing 30% of the company shares would be a better one!
Risk management. They would have rather had the $2.38 warrants exercise by April but that didn’t look likely. There was a lot of noise on wall street that credit markets might freeze up. I’m not happy with $1.50/$1.60 but they wanted to make sure they had the money for the ad campaign. Either that or they sold out to the shorts big time! So you re telling me there is no other possible way to get 80mil$ beside selling off 30% of the company.. you must be new here!
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Post by mytakeonit on Jan 4, 2019 16:05:28 GMT -5
Agree, no investor questions from the list we emailed in ahead of time. And no mention of the hoola dancing vacation. Pretty unbelievable, but actually very predictable. Sounds like you all think that a trip to Hawaii is expensive ... it isn't really unless you stay at a high ended hotel. Airfare is fairly cheap. Putting it in perspective ... my trip to Las Vegas was expensive ... and MNKD and company has been to Las Vegas and no one grumbled. Ha!
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Post by sportsrancho on Jan 4, 2019 18:28:29 GMT -5
if you read my response I said just that. The new warrants were likely a repricing of the old in effect. hmm.. so while at risk of not giving away 10% of the company for 2.38$, the decision was to give away 20% of the company for 1.50 and 1.60$.. without any current need for money! So in total this last decisions might mean that 30$ of the company was given away for something like 80mil$..
And again, why is there a need for securing money for the next 18months right now?
Its not like we have a solid streak in rising product sales doubling every year (which would mean for example 12month from now would be a much better option to give shares away..) Or why not giving shares away at all, but make another Deerfield deal? Any delay not costing 30% of the company shares would be a better one!
I believe this is correct. That’s why it’s been called a sloppy transaction. If there wasn’t another component to it, and now we all know there wasn’t. It’s really hard for me to buy the market is so scary scenario, because the market could be just fine for the rest of the year. Or not. Or bad next year...
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Post by sportsrancho on Jan 4, 2019 18:32:40 GMT -5
Ok, I will expose myself a little on my lack of knowledge on Warrants. If they don't get exercised and Mannkind does not get the Money, they get those shares back. Is this not a good thing? Rooks is always telling me Warrents are Toxic? I have tried to educate myself on Warrants but it does confuse me a little. Yes, the shares go back into the pot. However, Mike was clearly counting on the money from those $2.34 warrants to provide sufficient runway for operations in 2019. Since that money was very much in danger of never materializing, he was forced into a much worse offering with new warrants issued at a much lower price ($1.60). In general, warrants are toxic because the warrant holders have free reign to manipulate/short the stock to guarantee themselves profits. So for example, if I hold a $1.60 warrant and the price jumps to $2.00+, I can safely short the stock because worst case scenario, I can just exercise my warrants and buy those shares for $1.60 even if the price goes much higher. The more likely scenario is I can keep the cycle of shorting and covering over and over again until the warrants expire. This is exactly how hedge funds operate, they are all about arbitrage opportunities and they don't give a damn about how much it hurts the underlying companies and their shareholders. Thank you, I know it, but I can’t explain it well:-)
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Post by compound26 on Jan 4, 2019 18:42:51 GMT -5
hmm.. so while at risk of not giving away 10% of the company for 2.38$, the decision was to give away 20% of the company for 1.50 and 1.60$.. without any current need for money! So in total this last decisions might mean that 30$ of the company was given away for something like 80mil$..
And again, why is there a need for securing money for the next 18months right now?
Its not like we have a solid streak in rising product sales doubling every year (which would mean for example 12month from now would be a much better option to give shares away..) Or why not giving shares away at all, but make another Deerfield deal? Any delay not costing 30% of the company shares would be a better one!
I believe this is correct. That’s why it’s been called a sloppy transaction. If there wasn’t another component to it, and now we all know there wasn’t. It’s really hard for me to buy the market is so scary scenario, because the market could be just fine for the rest of the year. Or not. Or bad next year... Not saying what Mike and his team did (in respect of this offering) was perfect. But I think it is unfair to say there is no current need for money. Aside from the apparent concern of worsening stock market conditions and the drying of capital market for small caps, as mike noted in the conference call, Mannkind needs to make sure they have sufficient funds to ramp up the commercialization of Afrezza and pursue the pipeline for the next 12-18 months so that they can make the plans for 2019 and beyond. As Mike noted, they can certainly do that at a later point in 2019, but it makes quite a difference when you can have the plan in place and start to execute the plan in full steam right from the start of the new year. Plus, I think t here is a huge physiological difference in the mind of the sales representatives, prescribing doctors and patients when they know the drug manufacturer (Mannkind) has secured funding for the next 18 months (and beyond). Without this additional funding, there appears to be an apparent gap in the funding of Mannkind, which gives an impression that Mannkind may needs additional funding at any time (with cash balance of $70 million vs 30 million at the start of the year, then we need to consider that Mannkind needs to meet the minimum cash balance of $20/25 million at the end of each quarter as required by Deerfield, incoming Deerfield debt payment, insulin purchase obligations and uncertainty of the timing of UTHR milestone payment (i.e., we do not know when the next $12.5 million milestone will come in). At least for me, if I were a sales representative at Mannkind, I will feel much secured at this point (with this offering completed and $40 million in the corporate coffers). Additionally, I still recall Mike is the guy who sold his entire holdings of Mannkind the moment he received the news that Mannkind was partnering up with Sanofi. I have confidence that Mike has much better sense on the big picture of Mannkind than most of us here on this board.
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Post by peppy on Jan 4, 2019 18:49:42 GMT -5
I believe this is correct. That’s why it’s been called a sloppy transaction. If there wasn’t another component to it, and now we all know there wasn’t. It’s really hard for me to buy the market is so scary scenario, because the market could be just fine for the rest of the year. Or not. Or bad next year... Not saying what Mike did is perfect. But I think it is unfair to say there is no current need for money. As mike noted in the conference call, Mannkind needs to make sure they have sufficient funds to ramp up the commercialization of Afrezza and pursue the pipeline for the next 12-18 months so that they make the plans for 2019 and beyond. They can certainly do that at later 2019, but it makes quite a difference when you can have the plan and start to execute the plan right from the start of the new year. Plus, I think there is a huge physiological difference in the mind of the sales representatives, prescribing doctors and patients when they know the drug manufacturer (Mannkind) has secured funding for the next 18 months (and beyond). Without this additional funding, there appears to be an apparent gap in the funding of Mannkind, which gives an impression that Mannkind may needs additional funding at any time (with cash balance of $70 million vs 30 million at the start of the year, then we need to consider that Mannkind needs to meet the minimum cash balance of $20/25 million at the end of quarter as required by Deerfield, incoming Deerfield debt payment, insulin purchase obligations and uncertainty of the timing of UTHR milestone payment (i.e., we do not know when the next $12.5 million milestone will come in). At least for me, if I were a sales representive at Mannkind, I will feel much secured at this point. 70 million at the start of the quarter and 80 million on the capital raise correct? Mike, " and we started the year with approximately $70 million in cash from our balance sheet, the most in three years." "Additionally, we expect $37.5 million in milestones from treprostinil in the next 18 months in addition to further sales continuing to grow as December closed on our highest TRx and dollar sales numbers ever." "We’re excited to see the interim analysis presented at the upcoming scientific conferences in 2019. We thought being able to raise $80 million at an average price of $1.55 when you include the warrants, decreases our dependency on the capital markets. This funds our efforts to continue to grow revenue, manage our expenses and bring on more institutional retail investors." compound and all? seekingalpha.com/article/4231518-mannkind-corporation-mnkd-ceo-michael-castagna-investor-conference-call-transcript?part=single
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