rebby
Researcher
Posts: 73
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Post by rebby on Sept 29, 2021 19:34:44 GMT -5
I will assume that they have a plan and have evaluated the cash needed to support the plan. This cash is either required to fulfill the plan or stands as a buffer in the event of an unforeseen expense. I’m cautiously optimistic that this plan could be part of an explosive growth in SP….🤞🏻🙏🏻
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Post by nxc2 on Sept 29, 2021 19:40:19 GMT -5
“You don’t sell your manufacturing plant unless you’re in distress…” On the surface that’s how it looks, have to see how the market reacts in the morning. Hopefully there could be any number of positive reasons this was done. Most of us thought it wouldn’t be needed. is incorrect. Where did you get that info from? I have been with a few companies and we did sell and lease back as we were not in the real estate business. We were not in distress. A win-win for both parties |
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Post by cedafuntennis on Sept 29, 2021 19:41:14 GMT -5
If you calculate cost of money, that is like an interest free loan for 30 years (20 + 5 + 5). Considering the inflation at over 3% and likely increasing drastically with these monkeys in power, and accounting for the benefits they can get out of these funds in the immediate term, this is a very good deal in my mind. If used wisely, they could generate more than $80 MM annually in a few years, to dwarf the money they pay in lease and they can either buy back the facility in 30 years or build a new one with parts of the profits. Also, the lease is tax deductible which is another big benefit now that they will start making money.
It only bothers me that with every such thing, the credibility of MC goes lower and lower. He says one thing and does another. What does he possibly have to gain from doing that???
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Post by sportsrancho on Sept 29, 2021 19:43:20 GMT -5
“You don’t sell your manufacturing plant unless you’re in distress…” On the surface that’s how it looks, have to see how the market reacts in the morning. Hopefully there could be any number of positive reasons this was done. Most of us thought it wouldn’t be needed. is incorrect. Where did you get that info from? I have been with a few companies and we did sell and lease back as we were not in the real estate business. We were not in distress. A win-win for both parties |
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Post by nxc2 on Sept 29, 2021 19:47:05 GMT -5
“You don’t sell your manufacturing plant unless you’re in distress…” is incorrect. Where did you get that info from? I have been with a few companies and we did sell and lease back as we were not in the real estate business. We were not in distress. A win-win for both parties Thanks, That confirms my comments. All the big boxes lease. |
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Post by sportsrancho on Sept 29, 2021 19:48:05 GMT -5
Yes you were right.
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Post by mnkdfann on Sept 29, 2021 19:56:45 GMT -5
If you calculate cost of money, that is like a loan at around 3% annually. Considering the inflation at over 3% and likely increasing drastically with these monkeys in power, and accounting for the benefits they can get out of these funds in the immediate term, this is a very good deal in my mind. I haven't done the exact calculation, but I think the numbers make it quite a bit higher than 3%. |
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Post by mnkdnewbie on Sept 29, 2021 19:57:26 GMT -5
My neighbor paid $375k for his house in 2014. He just listed it last week for $715k and sold. His plan is literally to move in to his parents basement and wait for the housing market to crash and come back in the same neighborhood and buy another house for $400k. Maybe even his same house when the new owners walk because theyre underwater $300k.
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Post by stockwhisperer on Sept 29, 2021 20:01:25 GMT -5
If you calculate cost of money, that is like a loan at around 3% annually. Considering the inflation at over 3% and likely increasing drastically with these monkeys in power, and accounting for the benefits they can get out of these funds in the immediate term, this is a very good deal in my mind. It only bothers me that with every such thing, the credibility of MC goes lower and lower. He says one thing and does another. What does he possibly have to gain from doing that??? I think, after a while, when asked MC gave the impression that they might not do it but I do not remember him saying, they would definitely not do it. In any case, when researching sale - leasebacks, they seem popular and yes, appear to be a win - win for all parties - including shareholders. Companies that have plenty of money do sale leasebacks too. My bet is that MC & team researched this extensively and know exactly what they are doing. As always speculation runs wild. Looks like the new MNKD transformation is underway. |
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Post by porkini on Sept 29, 2021 20:10:10 GMT -5
In this day and age, why would anyone buy back 30-year old technology? I wouldn't, sounds like crazy talk to me.
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Post by cedafuntennis on Sept 29, 2021 20:42:43 GMT -5
The 9.5MM annually, come at 190 MM for 20 years. Actually, the interest could be like 0.00% annually for 30 years if they write off the property at the end of the 30 years. At the end, with all me money they save in tax deductions, repairs and the return they could make with this 100MM in 30 years, this building will be peanuts to them by that time and they can and probably will build a bigger and more efficient facility in a few years. All this contingent on investing the money smartly and things working out with Afrezza and most importantly the rest of the molecules they are looking at now and in the future. This is a big if, but 'if' it does, this will prove to be a very good transaction. IMHO
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Post by radgray68 on Sept 29, 2021 21:05:12 GMT -5
All these financial moves go towards streamlining our books, funding the next 5 years of growth and getting us to a profitable bottom line. I assert, it also goes towards making us a more attractive investment and even a buyout target for any ambitious BP. BP's aren't into real estate either, (IMHO)
If T-DPI is approved, rollout goes quickly, and Afrezza picks up some momentum, my math says we could reach cashflow breakeven by the end of next year. To me, that's worth a big Holy Cow!!! MC and Co. are full steam ahead. TOOT! TOOT!
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Post by mnkdfann on Sept 29, 2021 21:16:30 GMT -5
The 9.5MM annually, come at 190 MM for 20 years. Actually, the interest could be like 0.00% annually for 30 years if they write off the property at the end of the 30 years. At the end, with all me money they save in tax deductions, repairs and the return they could make with this 100MM in 30 years, this building will be peanuts to them by that time and they can and probably will build a bigger and more efficient facility in a few years. All this contingent on investing the money smartly and things working out with Afrezza and most importantly the rest of the molecules they are looking at now and in the future. This is a big if, but 'if' it does, this will prove to be a very good transaction. IMHO Those aren't the numbers in the agreement, though. Rent is never as low as $9.5 million after the first year. It increases annually thereafter. The total rent paid over your 20 years is more like over $245 million at the end (and ignoring time value). Personally, I don't see how you come out ahead by taking $102.5 million now and paying that amount of interest. It certainly does not translate into a low rate, anyway. Also, as far as I can see, it is not their building to write off at the end unless they take the option in the agreement to buy it back for the greater of $102.5 million or the fair market value (again, whichever is greater). Why would they buy it back for $102.5 million or more, to write it off for that or less? And, I don't know that they will save money on repairs. The agreement says Mannkind is still responsible for operating expenses, which includes general repairs and maintenance. Hopefully, the deal does somehow work out well in the end, but I don't think your defence of it stacks up given the factual details in the posted agreement. I think it is far from a sweetheart deal for Mannkind, and the terms are not great. |
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Post by lazyb767 on Sept 29, 2021 21:33:43 GMT -5
“You don’t sell your manufacturing plant unless you’re in distress…” On the surface that’s how it looks, have to see how the market reacts in the morning. Hopefully there could be any number of positive reasons this was done. Most of us thought it wouldn’t be needed. To speak accurately to the lease vs own strategy, one would need to be well versed in corporate accounting and taxation. Leases have many tax advantages. Any accounting and/or tax considerations would be specific to Mannkind's economic condition and business plan. Don't think there are any, "one size fits all" budgetary plans. YMMV I've only had Accounting 101. These are my thoughts, I could be wrong... "A businessman was interviewing job applications for the position of manager of a large division. He quickly devised a test for choosing the most suitable candidate. He simply asked each applicant this question, "What is two plus two?" The first interviewee was a journalist. His answer was, "Twenty-two". The second was a social worker. She said, "I don't know the answer but I'm very glad that we had the opportunity to discuss it." The third applicant was an engineer. He pulled out a slide rule and came up with an answer "somewhere between 3.999 and 4.001." Next came an attorney. He stated that "in the case of Jenkins vs. the Department of the Treasury, two plus two was proven to be four." Finally, the businessman interviewed an accountant. When he asked him what two plus two was, the accountant got up from his chair, went over to the door, closed it, came back and sat down. Leaning across the desk, he said in a low voice, "How much do you want it to be?" He got the job." |
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Post by mnkdnewbie on Sept 29, 2021 21:39:11 GMT -5
I'm no expert but they have probably already capitalized and fully depreciated the plant? Selling it now and writing off the rent as an operating expense and also can capitalize and depreciate any leasehold improvements seems smart to me if you are going to increase your revenue and need some operational expenses to write off...
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