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Post by trenddiver on Sept 10, 2014 21:45:39 GMT -5
Baba
- Any comment on whether Big Al is the big dog shorting? If so, wouldn't that have a neutral effect on PPS.
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Post by babaoriley on Sept 10, 2014 22:32:02 GMT -5
Not sure I follow, Trend, please explain the neutral effect. As to whether Al is shorting, I really doubt it. I would think he might even buy a few shares to support the price if it gets much lower. Can you imagine if it accurate word got out that Al was shorting? I don't even think Pete Rose bet against the Reds!
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Post by jpg on Sept 10, 2014 23:53:36 GMT -5
Baba - Any comment on whether Big Al is the big dog shorting? If so, wouldn't that have a neutral effect on PPS. What? Does that even make a lot of sense? Those surprised by price action and thinking it is all the shorts fault should read this 'long board' for a while... We are often our worst enemy. Granted the naked short thing (even naked 'intra day' algo shorting) is a menace to innovation by corrupting the foundations of markets and especially for small companies and skews price dynamics terribly. It would be much harder to do if there wasn't such a casino/ short term thinking going on. Then again these algos push us to think short term. Which goes right back to the corrosive nature of this way of trading. Markets were never set up for this and this type of trading has no overall societal benefit. SAC et al. do well only (until they go to jail and we have to pay for that also...). JPG |
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Post by joeypotsandpans on Sept 11, 2014 10:28:01 GMT -5
So it is blatantly obvious that the selling on this down leg post partnership announcement is getting fairly dried out as the exhausted longs and volatility traders have sold out and what we have left are the long term longs and the SI that remains from 8-15 thru today. How much of that 55 mill. in volume from 8/15 - 8/29 was short covering we'll know after today's close. No surprise of the test today with overall market under a bit of pressure this week, keep an eye on the 10yr. treasury as it tests the 2.55 area in yield. So what does it mean when we close below the 200 day SMA? DBC, I have mentioned in the past that I prefer to look at the weeklies and how we end up for the week. The reason I personally prefer the weekly chart is a lot of times you can have an single day trap you and following the weekly charts will also force you into not letting emotions get the best of you. So in that context, I would prefer to see how we end up for the week and then take a broader look at everything. The following talks about the short interest in biotechs: 247wallst.com/healthcare-business/2014/09/11/short-sellers-remain-vigilant-against-biotechs/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+typepad%2FRyNm+%2824%2F7+Wall+St.%29 the days to cover based on the declining volume that I was pointing out in yesterday's post is something if I were a short would be a concern for me. See the SA article that came out a little bit ago regarding the increased likelihood of the short squeeze scenario based on those factors: seekingalpha.com/article/2487765-could-a-mannkind-short-squeeze-be-on-its-waySo in direct answer to your question, there is almost always at least two tests of a support or resistance area for that matter. Closing for one or two days below or above is not as significant to me as the volume and how it acts for the next few days from there. The drop below yesterday did not convince me that there was conviction behind the break of support as it was on far fewer shares than the original test. I will reserve any judgement on it until the beginning of next week and see how the rest of this week plays out. |
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Post by trenddiver on Sept 11, 2014 11:22:47 GMT -5
This is my theory, and it is only a theory. I'm not sure of Al 's exact holdings but let say for this discussion -150MM.shares. Many of those shares were acquired by converting debt to equity. I view Al as a very prudent investor who's investment in Mannkind was higher than he might have preferred, particularly since much of his holdings are held by his foundation. So I aim thinking that Al has been shorting against the box. That way he locked in a price during the periods of great uncertainly. He was able to convert the stock which he received for his debt back to cash, there was no SEC disclosure requirement triggering insider selling alerts. BTW, I recall a large increase in the short position at the time Al did the conversion. At the end, Al will deliver his own shares to close out the short position, which would be share price neutral (no short squeeze).
As to Al's motives, he's already made all the money he needs to make. He just doesn't want to lose any money. In my opinion, Al's goals right now are what's in the "best interest of patients and shareholders", in that order. That was his quote at the ASM when asked about the sale of Mannkind.
For me, it's the only explanation of the large short position that me sense. That being said, I'm kinda at a loss what to do. I'm holding a large position and my plan was to sell when Al sells.
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Post by joeypotsandpans on Sept 11, 2014 12:03:57 GMT -5
This is my theory, and it is only a theory. I'm not sure of Al 's exact holdings but let say for this discussion -150MM.shares. Many of those shares were acquired by converting debt to equity. I view Al as a very prudent investor who's investment in Mannkind was higher than he might have preferred, particularly since much of his holdings are held by his foundation. So I aim thinking that Al has been shorting against the box. That way he locked in a price during the periods of great uncertainly. He was able to convert the stock which he received for his debt back to cash, there was no SEC disclosure requirement triggering insider selling alerts. BTW, I recall a large increase in the short position at the time Al did the conversion. At the end, Al will deliver his own shares to close out the short position, which would be share price neutral (no short squeeze). As to Al's motives, he's already made all the money he needs to make. He just doesn't want to lose any money. In my opinion, Al's goals right now are what's in the "best interest of patients and shareholders", in that order. That was his quote at the ASM when asked about the sale of Mannkind. For me, it's the only explanation of the large short position that me sense. That being said, I'm kinda at a loss what to do. I'm holding a large position and my plan was to sell when Al sells. Trend, I can't buy into that theory and here's why, you find it too hard to believe that the short interest could be just a wrong bet on the success of the company, if your theory were correct then Al would have most likely had no qualms about screwing over those that are close to him (friends of Al), he would have had to have serious doubts about the success of Afrezza and Technosphere otherwise he would have no reason to fear any potential loss, he would be in cahoots with AF, Karp, et al., he would have to have been doing it for quite some time as the SI has steadily increased over a long period of time. How much of the SI would you think he shorted and when? I think you should stick to your original game plan and sell when Al sells  |
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Post by trenddiver on Sept 11, 2014 12:58:40 GMT -5
Joey,
I don't think it's so simple. Going short against the box is not necessarily a bet against the company. It's just locking in a selling price for shares he probably didn't want to own. As you recall, at the time Al received 40MM shares (4th quarter 2012), it was in exchange for debt that he graciously lent the company. When it came time to pay off the debt, the Company didn't have the money, so Al took shares. By selling short at that time, he would have been able to repay the loan in cash not stock. Don't forget, it was a very risky time for MNKD in late 2012. Also, Al still owned 75MM-100MM. So he would still have been able to participate substantially in the upside of MNKD.
Shorting against the box is not a zero sum gain. You can be prudent and protect yourself, and not be screwing other shareholders. And I am sure that Al, like every other shareholder had serious doubts when the last CRL was received. It's a tribute to Al that he continued to fund the company. I think his continual support was more for patients as opposed to financial gain.
As to selling, since I have no proof of my theory, I'll continue to hold and sell when Al sells, for he still holds plenty of shares (even if he did short against the box).
Trend
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Post by jpg on Sept 11, 2014 13:48:56 GMT -5
Joey, I don't think it's so simple. Going short against the box is not necessarily a bet against the company. It's just locking in a selling price for shares he probably didn't want to own. As you recall, at the time Al received 40MM shares (4th quarter 2012), it was in exchange for debt that he graciously lent the company. When it came time to pay off the debt, the Company didn't have the money, so Al took shares. By selling short at that time, he would have been able to repay the loan in cash not stock. Don't forget, it was a very risky time for MNKD in late 2012. Also, Al still owned 75MM-100MM. So he would still have been able to participate substantially in the upside of MNKD. Shorting against the box is not a zero sum gain. You can be prudent and protect yourself, and not be screwing other shareholders. And I am sure that Al, like every other shareholder had serious doubts when the last CRL was received. It's a tribute to Al that he continued to fund the company. I think his continual support was more for patients as opposed to financial gain. As to selling, since I have no proof of my theory, I'll continue to hold and sell when Al sells, for he still holds plenty of shares (even if he did short against the box). Trend Hi Trend, The biggest shareholder and CEO massively shorting... Yeah. No material disclosure needed. Nothing to see here. If this is the best or most credible explanation you can come up with to explain the massive short position then I would guess you are misinformed as to how shorts ply their trade (basically they often can be simply wrong and fall for group think like any investors). Your theory simply defies every piece of information we know about A. Mann, how successful innovators generally think and act and generally speaking how markets work. And no A. Mann massively shorting would not have been 'neutral' as you claim. His massive shorting would have come at exactly the wrong time and would have influenced very negatively the issuance of stock/ convertible debt/ debt/ and bargaining power which were all hurt by a lower share price. Not in anyone's interest and especially not in A. Mann's interests. This would have been a massively negative and material event and probably illegal or at least very 'suable'. Did you come up with this one on your own or did you get it from someone else? if you got it from an analyst or market participant it would be interesting to know your source. JPG |
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Post by mannmade on Sept 11, 2014 20:10:49 GMT -5
With all due respect to all in this discussion about Al Mann shorting mannkind, here is the one and the only reason why I doubt he did this...
I am a serial entrepreneur and I do not know a single one who would vote against himself... Now I know Trend is talking about more pragmatic reasons for Al Shorting so let's look at that a minute in a very simplistic and straight forward way...
As a former Compliance Lawyer I was always told it's not necessarily the actual fact(s) but the perception of the fact(s) and that is what you must be prepared to defend against in the event of an inquiry or other news reports etc... And there are no more secrets so be prepared for how it will look in the headlines when you are making decisions...
With the aforementioned advice in mind, if Al were to have shorted as mentioned and did so during the "vulnerable period" mentioned and this news got out, which all news does eventually in this day and age, it would have wiped the company and him out, as it would have been seen as a complete lack of faith in Afrezza. And it would have also been perceived as an end run on the faithful shareholders... NOT WORTH THE RISK, even with Mannkind Corp which seems to be able to hold a secret better than the NSA.
Simply stated not worth the risk and not who I believe Al Mann to be... Just mho... GLTA!
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Post by trenddiver on Sept 11, 2014 21:56:04 GMT -5
JPG and Mannmade,
I apologize in advance for having these bazaar thoughts. But let me start off by stating these are my own thoughts and I have no knowledge that this has occurred. The ever increasing short position both in no. of shares and dollar value of the short position just didn't make sense to me, so I came up with my own explanation which I profer to this Board for comment. Legalities?, I'm not a lawyer so I ask - is shorting against the box illegal if you are the CEO? Is disclosure required? I think both of those answers are no.
I agree that Al is a great entreneur but I don't necessarily think that shorting against the box is a vote against the Company. It just may be good financial planning or good estate planning. None of us knows what is going on with Al Mann's personal financial or estate planning or what his cash requirements might be.
What I meant by shorting against the box is share price neutral, I was referring to the future covering of those shorted shares would not be such a squeeze, because Al could just deliver his shares. And if there was a price effect to Al shorting in 2012 and 2013, it would have driven down the price to a point where some of us were able to get in very cheap.
BTW, at the time that Al was repaid he loan with shares, the short position of Mannkind was around 30MM shares.
I also wonder whether Al is facilitating the short interest by lending his 150MM shares and earning a pretty good interest rate.
Trend
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Post by mannmade on Sept 11, 2014 22:01:10 GMT -5
Trend no need for an apology as I see it... Don't think you are off base with the theory, I am just adding my two sense as it relates to what I know and think about Al Mann and as it applies to the theory you propose... I am not offended in the slightest and what you say does make some sense, but for the reasons I wrote, I think it would not be the case in this instance... That's all and it's just my opinion as I have as much info as you do... Which is very little at the moment on this subject... Just a good spirited conversation on my end...
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Post by BD on Sept 11, 2014 22:46:49 GMT -5
trend, you have to realize that a humongous short position is not an unambiguous indicator that there's something necessarily wrong with a company. Certainly that would be one possible explanation, generally speaking, but it doesn't make much sense for this company.
I've been an investor in GMCR since some time in '06. For the period between '06 and mid-'11, the short position was very high and, in fact, kept getting higher IIRC. Take a look at the chart of GMCR for that period... Then, of course, in '11, after what was a truly parabolic run, Einhorn et al. piled on and a lot of shorts probably were able to make money. But then, when Einhorn's negative theories about the company were mostly discredited, GMCR bounced back strong and is again trading around lifetime highs...and now, with a short interest that's down to a dull roar (finally). And, Einhorn has apparently never said to his shareholders that he's ever covered his GMCR short, so that's at least a small consolation for the havoc his short campaign has wreaked on the company and its shareholders.
After that experience (specifically, the first 4 years of it), I tend to ignore the short position when making my investing decisions about MNKD, or at least not think of it as a negative (if anything, at this point, it's a positive because of the squeeze potential and the fact the PPS has been so compacted already.)
I'm not ecstatic at the thought of having to wait another number of years for a significant payday on my investment, but I'm perfectly willing to wait and I sure hope my other positions can generate some gains for a change in the meantime, so I can afford to put more into MNKD as the clearance sale continues...
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Post by jpg on Sept 12, 2014 5:06:20 GMT -5
HinTrend,
Again I don't understand why Mann has to be involved in shorting to explain any of the short position? Hedge funds and individual investors are routinely doing this type of shorting without any help from CEOs who have invested a big part of their life's savings and reputation in the company. Can you name me one company where the CEO was involved in shorting his own stock?
As I said at the time you speculate he would have done this he would have been responsible for driving down the share price terribly and at the worst time for raising capital. Why would he do this? How could Mannkind and Mann ever survive such a civil lawsuit if and when the facts became public (which they have a tendency to do)?
If it is simply your 'pet theory': no issues with that. An opinion is an opinion. If just sounds like one of those nasty rumors spread by shorts to cause a 'where there is smoke there is fire' type of mood. Guilt by rumor...
JPG
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Post by trenddiver on Sept 12, 2014 23:07:40 GMT -5
JPG,
Yep. Just my "pet theory". No different then the theories re Sanofi buying shares. According to my theory, the capital raise had already taken place. That is when the short interest began to dramatically increase. As I stated earlier, I'm not a lawyer, just a "bean counter", who is long over 50k shares. I'm just tring to understand something that just doesn't make sense. And as Judge Judy says, "if it doesn't make sense, it's not true. I am just looking for truth.
BTW, is Al prohibited from lending out his shares to the short sellers and earning big interest? Would he do such a thing? I say why not. It makes perfect sense to me. Especially if Al has the long view and is less concerned about share price today and more concerned about getting Afrezza produced and distributed. It kinda goes like this, why not let these crazy shorts borrow my shares and have them pay me $70MM-$100MM per year to short the stock with my shares. In the long run they are going to lose lots of money and pay me at the same time!
At the ASM, I asked Al about the large short interest expecting some statement to the effect that the shorts are about meet their maker, instead Al just kinda of shrugged his shoulders. That's actually what got me thinking that maybe something else is going on.
Notwithstanding anything stated above, I am a believer in the company and will add to my position if the opportunity presents itself at lower prices.
Trend
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Post by jpg on Sept 13, 2014 20:07:03 GMT -5
Citi (or some other bank) had (and still has I think as the conditions for returning the shares have not been meet) a deal for 10 million (or something like that) shares to be leant by Mann in the context of a loan agreement. This is fuzzy to me so the details are maybe not perfect but it was fully disclosed.
I can't see Mann not being obligated to disclose such a significant piece of information.
My visceral dislike (sorry...) of your theory is that what you are suggesting would make one of my major reasons for investing in Mannkind void: faith in management integrity.
JPG
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