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Post by MnkdWASmyRtrmntPlan on Jun 9, 2022 14:23:21 GMT -5
Institutional buying.
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Post by sportsrancho on Jun 10, 2022 6:52:42 GMT -5
Those were Mike’s thoughts before when he diluted he was “afraid of the market” that usually happens right before the market goes up. The December surprise. Mannkind selling shares the shareholders authorized for the purpose would not cause the market to go up or down and “now is as good a time as any” could easily be the thinking of a CFO watching current market conditions and looking to use equity to capitalize operations. Binder has been brilliant. I trust his judgement. Huh? I can’t make any sense out of what you said. I’m just saying everybody thinks the market is going to keep going down, that may not be the case because we’ve got the 20% correction most people thought we needed.🤷♀️ |
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Post by peppy on Jun 10, 2022 6:56:56 GMT -5
The December surprise. Mannkind selling shares the shareholders authorized for the purpose would not cause the market to go up or down and “now is as good a time as any” could easily be the thinking of a CFO watching current market conditions and looking to use equity to capitalize operations. Binder has been brilliant. I trust his judgement. Huh? I can’t make any sense out of what you said. I’m just saying everybody thinks the market is going to keep going down, that may not be the case because we’ve got the 20% correction most people thought we needed.🤷♀️Sports, just an FYI, ******QT starts June 15th with the first pay downs. we haven't seen anything yet. CNBC are sales man. Becareful, the market barely bounced this last attempted uptrend. For instance today, we continue down. |
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Post by prcgorman2 on Jun 10, 2022 21:14:50 GMT -5
Can someone remind me who made the post speculating that if Binder had used the ATM it was most likely to pay off the MidCap loan? I can’t find that post and that was a really excellent analysis. I wanted to ask the author their thoughts on what that meant for MNKD in terms of operating debt free?
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Deleted
Deleted Member
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Post by Deleted on Jun 11, 2022 0:29:48 GMT -5
Can someone remind me who made the post speculating that if Binder had used the ATM it was most likely to pay off the MidCap loan? I can’t find that post and that was a really excellent analysis. I wanted to ask the author their thoughts on what that meant for MNKD in terms of operating debt free? I don't know but I seriously DOUBT MNKD would have paid off Mid Cap, a loan they just renegotiated with excellent terms. That makes no sense for a small cap company who needs capital for growth. I would like to see that analysis. Now I said Mike probably tapped the ATM instead of incurring more debt with the approval Tyvaso DPI. Mike probably settled for $45M and not the $60M Loan. IMO it was a smart move if it's true. |
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Post by prcgorman2 on Jun 11, 2022 10:16:46 GMT -5
Can someone remind me who made the post speculating that if Binder had used the ATM it was most likely to pay off the MidCap loan? I can’t find that post and that was a really excellent analysis. I wanted to ask the author their thoughts on what that meant for MNKD in terms of operating debt free? I don't know but I seriously DOUBT MNKD would have paid off Mid Cap, a loan they just renegotiated with excellent terms. That makes no sense for a small cap company who needs capital for growth. I would like to see that analysis. Now I said Mike probably tapped the ATM instead of incurring more debt with the approval Tyvaso DPI. Mike probably settled for $45M and not the $60M Loan. IMO it was a smart move if it's true. No argument with what you’re saying per se but what if you felt like it might be the last dilution you would ever do? That you thought you could manage with what was in your coffers and what you were bringing in, and debt later if needed? I saw an analysis recently of the cost of equity versus debt and it predictably said debt is cheaper but what surprised me was how much cheaper even against surprisingly high interest. Dilution isn’t desirable, but also doesn’t have to be forever because stock buy back happens all the time, so much so that the quantity of publicly-listed companies has dramatically reduced in the last 20 years. It’s fascinating. Thanks for your view, I appreciate it, and I hope I get to see other posts on this topic. |
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Post by MnkdWASmyRtrmntPlan on Jun 11, 2022 17:07:32 GMT -5
That is fascinating, PRC. The thing is, considering Mike's past affection for dilution, I don't see him ever doing buy-backs. MNKD already has enough loans to payoff for years to come. As long as Mike is in charge, I foresee more dilution for many more years to come.
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Post by oldfishtowner on Jun 11, 2022 23:43:45 GMT -5
Can someone remind me who made the post speculating that if Binder had used the ATM it was most likely to pay off the MidCap loan? I can’t find that post and that was a really excellent analysis. I wanted to ask the author their thoughts on what that meant for MNKD in terms of operating debt free? C'est moi! C'est moi, I'm forced to admit. 'Tis I, I humbly reply. That mortal who These marvels can do, C'est moi, c'est moi, 'tis I.
The original post is in the Volume X tread toward the bottom of page 28.
At first I intended just to correct peppy with regard to the maximum amount MNKD could borrow under tranche 3, i.e., that it had been raised from $25 million to $60 million. But then it occurred to me that the $45 million transaction speculated to be the ATM in action, was close to what MNKD owed on the MidCap loan. I never did like the terms of the MidCap loan, but beggars can't be choosers. MNKD needed the money at the time. My thought is, do they need it now?
I was looking at the press release for the last MidCap loan revision when I wrote the the post, so the figure I gave for the early payoff penalty is wrong, It is at this time $2 million. It does not reduce to $1 million until April next year. But that is inconsequential.
While my suggestion of this possible reason for the use of the ATM is pure speculation, and we don't even know if the ATM or MNKD was involved in those trades, management's focus on reaching breakeven if not profitability as soon as possible was the reason it made sense to me.
Both the Mann Group note and the senior convertible note are likely to be converted into stock. The interest on the senior convertible note and the Mann Group note is only 2.5% and the interest in the Mann Group note is payable in stock. The interest rate on the MidCap note has a floor of 7.25% and a cap of 8.25%. Since the LIBOR is above it's floor of 1% (1.1%) and will likely rise to 2% or more in the near future due to inflation and the Fed raising interest rates, the effective interest rate on the MidCap loan will be 8.25% very soon. At 8.25% the annual interest on the MidCap loan would be $3.4 million. If MNKD needed to borrow the $60 million available from tranche 3, the annual interest payment to MidCap would jump to $8.25 million, more than the quarterly gross profit from Afrezza ($7.5 million in 1Q22). So you have to ask, is the availability of tranche 3 at all useful?
A decision to payoff the MidCap loan involves a number of other considerations. Some that I can think of include: Does management feel MNKD has enough cash to weather a recession without MidCap? Could a recession result in a drop in Afrezza scripts that results in non-compliance with the financial covenant regarding Afrezza net revenue and trigger the requirement for MNKD to keep $90 million in unrestricted cash and short-term investments, and how would this affect MNKD's ability to continue with its planned activities, especially in a recession? How important is achieving profitability and does management see this as supporting the stock price, enhancing stockholder value and improving the company's ability to raise cash if needed?
I don't know the answers to these questions. But what I do know is that MidCap has some say on any major investments or acquisitions MNKD may want to make and, as the latest 10-Q states, has a security interest in substantially all of MNKD's assets, including its intellectual property.
Some may shrug this off. But I see it as a huge burden for management in completing the final phase of the company's turnaround. And as soon as I could I would want to say, thank you for all your help, to MidCap, but it's time to part ways.
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Post by prcgorman2 on Jun 12, 2022 10:27:12 GMT -5
SO GLAD I ASKED!!! Thank you oldfishtowner! ([former] Bostonian?)
The interest rate hike is a forgone conclusion. Peppy’s been posting in “Change of Trend” all of the Fed moves in Quantitative Tightening and other measures such as raising bank deposit requirements, and of course everyone’s favorite: interest rates.
Even though many thoughtlessly complained about Afrezza script counts staying flat during the worst pandemic in US history (considering there were no lockdowns in 1917), I would say that Afrezza at least, and I will speculate Tyvaso DPI will be similar in regards to being recession (depression?) resistant. The bottom-line being the bottom-line should be more predictable than interest rates.
There should be enough cash on hand to operate for a few quarters, and establish a better FCF which I assume could play into better terms on the next loan for operating capital.
That’s the view from the guy whose never negotiated a business loan and is merely speculating. Would love to read more views from OFT (OldFishTowner) and others. Thanks again!
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Post by oldfishtowner on Jun 12, 2022 20:55:04 GMT -5
Not Boston. The Fishtown neighborhood of Philadelphia.
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Post by georgethenight2 on Jun 13, 2022 0:59:56 GMT -5
Can someone remind me who made the post speculating that if Binder had used the ATM it was most likely to pay off the MidCap loan? I can’t find that post and that was a really excellent analysis. I wanted to ask the author their thoughts on what that meant for MNKD in terms of operating debt free?
I don't know the answers to these questions. But what I do know is that MidCap has some say on any major investments or acquisitions MNKD may want to make and, as the latest 10-Q states, has a security interest in substantially all of MNKD's assets, including its intellectual property.
Some may shrug this off. But I see it as a huge burden for management in completing the final phase of the company's turnaround. And as soon as I could I would want to say, thank you for all your help, to MidCap, but it's time to part ways.
With the possibility increasing that we become cash flow positive in the near future, could other suitors be calling? I am of the thinking that, if all toxic/strangling debt is free and clear, we become a MUCH attractive target. Namely, if Tyvasao D.P.I. meets and/or exceeds United's expectations, we could be in for some interesting times. MidCap thank you, but no thank you. |
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bkdmd
Researcher
Posts: 79
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Post by bkdmd on Jun 13, 2022 4:48:14 GMT -5
Huh? I can’t make any sense out of what you said. I’m just saying everybody thinks the market is going to keep going down, that may not be the case because we’ve got the 20% correction most people thought we needed.🤷♀️Sports, just an FYI, ******QT starts June 15th with the first pay downs. we haven't seen anything yet. CNBC are sales man. Becareful, the market barely bounced this last attempted uptrend. For instance today, we continue down. The Shiller PE of the S&P 500 was just recently the second highest Shiller PE in history. The historical average is around 17. We are currently over 30. Analysts haven't yet begun to lower EPS estimates for the rest of the year. The analysts are expecting $61 and $64 EPS for the SPX in the third and fourth quarters. |
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Post by oldfishtowner on Jun 13, 2022 8:00:21 GMT -5
Sports, just an FYI, ******QT starts June 15th with the first pay downs. we haven't seen anything yet. CNBC are sales man. Becareful, the market barely bounced this last attempted uptrend. For instance today, we continue down. The Shiller PE of the S&P 500 was just recently the second highest Shiller PE in history. The historical average is around 17. We are currently over 30. Analysts haven't yet begun to lower EPS estimates for the rest of the year. The analysts are expecting $61 and $64 EPS for the SPX in the third and fourth quarters. The Fed's actions to reign in inflation are totally inadequate. Real interest rates are still negative on T-bills. In 1981, the last time inflation was this high, inflation was 10.32%. I had just started buying T-bills at auction from the Bureau of the Public Debt - had to do it by mail in those days. I was getting 14% or more interest. In 1982 we moved. The house I purchased had been on the market for well over a year and there were plenty on the market to choose from. I made an offer on the house that was so low the real estate broker refused to take it to the buyer's agent. She said they'd laugh at her and she would be embarrassed. I got the house at the price I wanted. My mortgage was a 16% variable rate. My point is that we have a ways to go yet. |
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Post by radgray68 on Jun 13, 2022 12:05:51 GMT -5
Hello it's 1975 all over again. It's going to take a good decade to get over the extra $6 TRIILION printed in the last 2 years.
If, and that's a big unlikely if, mike sold or sells some ATM shares, there will be a specific reason for it like increasing manufacturing, pipeline trials or acquisitions. I trust this crew to be careful.
Notice that the Oracle of Omaha, known to sit on tons of cash, is currently deploying his cash buying more of his favorites. "Buy when there's blood in the streets."
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Post by Chris-C on Jun 13, 2022 21:19:16 GMT -5
Americans are in denial. Consumer debt is at 15 Trillion and increased 5% in the past year, more than double the rate of the previous year. Mortgages and auto loans experienced the greatest increases. The average mortgage balance is $190K, and the average consumer debt excluding mortgages is $38K. Might be time to rerun the "The Big Short." Inflation will not abate until the foreclosures begin or a few more adults start showing up to exhibit spending discipline. JMHO.
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