|
|
Post by akemp3000 on Dec 20, 2022 13:01:23 GMT -5
Key words are missing. "...the most important thing for the buyer is to accurately value THE ANTICIPATED FUTURE value of the company...". To only consider the current value would be shortsighted and would end most acquisitions. It seems this is the basis for different perspectives. I agree with everything else.
|
|
|
|
Post by akemp3000 on Dec 20, 2022 13:12:22 GMT -5
Companies do not only buy undervalued companies because they can get them cheaply. They also buy them for mergers that will increase the buyers value, for future potential into new or existing markets and even to prevent a company from growing and capturing some of the buyers existing market share. BTW, even though we have differing opinions on some things, I really do appreciate all your posts. All the best for 2023!
|
|
|
|
Post by longliner on Dec 20, 2022 13:16:03 GMT -5
Aged, how's the view from the sidelines? The view from the field is awesome! Happy Holidays
|
|
|
|
Post by sayhey24 on Dec 20, 2022 13:45:43 GMT -5
It will be a frost day in hell before there is a 2x or 3x offer.  Nothing to do with Mannkind, but rather that deals don't get done with those multiples pretty much regardless (there may be one or two in very weird cases, but this is not sufficiently weird!) This is not really how M&A works. There needs to be a concrete strategic driver and right now that is missing. From the big three standpoint they don't have to bother about Afrezza because it's market share is so small. Will it grow after the pediatrics trial? Yes, but to what extent? They can't quantify that so they cannot price it - that's a show stopper since they cannot price that revenue into the deal so the offer will be pretty awful. Matt describes what I am trying to say far better in this post - mnkd.proboards.com/post/99519The summary is that almost all deals are done for an under 35% premium, in some weird cases it may go over 50%. Nobody is going for 200 to 300% premiums. Matt explains why in his post, but the summary is that the purchase needs to be justified to the acquirer's shareholders who tend to react badly to purchases that reduce the share price. It is worth doing a search for posts from Matt and with the search term buyout. Aged - is the "concrete strategic driver" missing or not being realized? That is the question. This would not be a typical M&A deal. Come on Man - its MNKD! If an interested party believes Al Mann was right and afrezza has the potential he believed is not the concrete strategic driver there? Just because current MNKD management doesn't know how to market and sell afrezza does mean a new management team would not or more importantly believe they would. The first question which needs to be answered is - is afrezza really as good as Al Mann thought. The second question is - is prescribing afrezza as the first line of care a better approach than the current step program. I would argue yes to both questions to any interested party. I think if we ask Mike he would also say yes. In fact Mike as a newly minted T2 went directly to afrezza. We have a highly unusual case with MNKD. I also think if you asked Mike he is not willing to give it away at a fire sale after $3B+ was put into afrezza development and with Tyvaso DPI revenue paying the bills he does not have to. At some point Mike or some one else is going to figure out what needs to be done to sell afrezza. Its not a question of if but rather how soon. |
|
|
|
Post by cretin11 on Dec 20, 2022 14:54:50 GMT -5
Precisely. Some might think Mannkind could actually be purchased today for 2X or 3x which, based on a currently valuation of approximately $5 would only be $10 or $15. It's now reasonable to foresee the pps reaching $10 or $15 in the not too distant future. This means the actual purchase price at 2X or 3X could be $45. ... Anyone who thinks a buyer would buy MNKD today for 2x or 3x is doomed to disappointment. That's a 200% to 300% premium! To a very large extent buyers go after undervalued companies because they can buy them cheaply, not so they can pay the market rate. That is correct (as Matt and sports have also stated). If anyone wants my shares at 2x or 3x I will make that deal. But there will be no takers, because they can simply buy at 1x instead. In a nutshell that’s why there are virtually no 2x or 3x deals, as the acquiring company’s shareholders would raise holy hell. Even 50% premium is steep and we wouldn’t necessarily get that much. |
|
|
|
Post by cretin11 on Dec 20, 2022 15:00:40 GMT -5
Matt describes what I am trying to say far better in this post - mnkd.proboards.com/post/99519The summary is that almost all deals are done for an under 35% premium, in some weird cases it may go over 50%. Nobody is going for 200 to 300% premiums. Matt explains why in his post, but the summary is that the purchase needs to be justified to the acquirer's shareholders who tend to react badly to purchases that reduce the share price. It is worth doing a search for posts from Matt and with the search term buyout. Aged - is the "concrete strategic driver" missing or not being realized? That is the question. This would not be a typical M&A deal. Come on Man - its MNKD! If an interested party believes Al Mann was right and afrezza has the potential he believed is not the concrete strategic driver there? Just because current MNKD management doesn't know how to market and sell afrezza does mean a new management team would not or more importantly believe they would. The first question which needs to be answered is - is afrezza really as good as Al Mann thought. The second question is - is prescribing afrezza as the first line of care a better approach than the current step program. I would argue yes to both questions to any interested party. I think if we ask Mike he would also say yes. In fact Mike as a newly minted T2 went directly to afrezza. We have a highly unusual case with MNKD. I also think if you asked Mike he is not willing to give it away at a fire sale after $3B+ was put into afrezza development and with Tyvaso DPI revenue paying the bills he does not have to. At some point Mike or some one else is going to figure out what needs to be done to sell afrezza. Its not a question of if but rather how soon. sayhey, aged may feel differently but I’m pretty sure Afrezza is not a “concrete strategic driver” in that sense. Doesn’t really matter whether it’s missing or just not being realized. It’s not a new story, it is a known quantity by the relevant players. If any potential acquiring company actually believed in Afrezza as such a driver, then the deal would’ve happened long ago. I do hope you are correct that if Mike doesn’t figure out how to market Afrezza, someone else surely will. He’s not going anywhere (it appears) so there is no “someone else” on the foreseeable horizon. |
|
|
|
Post by akemp3000 on Dec 20, 2022 15:09:49 GMT -5
As discussed, couldn't disagree more except for the point made that shares are available at current pricing. That said, opinions are free, sometimes insightful, often entertaining and always appreciated. Some probably need to be saved for future discussion, like maybe a year or two from now. All the best in 2023.
|
|
|
|
Post by prcgorman2 on Dec 20, 2022 16:26:11 GMT -5
I seem to have touched a nerve with the 2x to 3x buyout speculation. Sorry. Not sorry? ;-)
|
|
|
|
Post by akemp3000 on Dec 20, 2022 16:43:29 GMT -5
Haha. Not sorry at all. It's topics like this that provide energy and enthusiasm for the message board  |
|
|
|
Post by cretin11 on Dec 21, 2022 1:02:34 GMT -5
I seem to have touched a nerve with the 2x to 3x buyout speculation. Sorry. Not sorry? ;-) Definitely not sorry. Nothing wrong with some good fantasizing, as we’ve been missing that around here lately. And those of us who like to slum it over on ST see even more entertaining predictions routinely. |
|
|
|
Post by Clement on Dec 21, 2022 6:52:34 GMT -5
3x buyout today. Not likely.
However, consider this possibility:
Share price today is $5.00. In the next 18 months it goes up to $12.00 due to Tyvaso DPI. Then buyout at $15.00 at 25% premium.
|
|
|
|
Post by akemp3000 on Dec 21, 2022 7:15:34 GMT -5
If ANY stock rises from $5 to $12 in 18 months and is on a growing trajectory, why would any controlling shareholder(s) vote to sell at only $15? Charts would indicate the likelihood of it soon hitting $15 without selling??
|
|
|
|
Post by Clement on Dec 21, 2022 7:57:02 GMT -5
If ANY stock rises from $5 to $12 in 18 months and is on a growing trajectory, why would any controlling shareholder(s) vote to sell at only $15? Charts would indicate the likelihood of it soon hitting $15 without selling?? Why sell? I would sell and have a party before I die. |
|
|
|
Post by prcgorman2 on Dec 21, 2022 8:45:48 GMT -5
As mentioned before, buyouts tend to increase the share price of the acquisition target, sometimes dramatically. So an offer to buy at $15 on a $12 stock might be a naive(?) attempt to not have the purchaase price exceed $18 to $20. Is MNKD worth a $5 to $6B market cap? I think the wildcard is Afrezza.
If Afrezza can have even 10% market share of prandial insulin, the answer is obvious. Afrezza is human insulin in inhalable form. It exhibits ultrarapid action, just like, um, well human insulin. If the question is whether the product quality is worthy of 10% of the market, again, the answer is obvious. So the questions that remain are, can prescribers be convinced of it’s superiority and SAFETY (SAFETY, SAFETY), and can Pharmacy Branch Managers be convinced to provide Tier 1 coverage? And on this last question, the recent Inflation Reduction Act language supporting inhalable insulin for Medicare patients might have a significant bearing.
The Tyvaso DPI news is very good and seems to be getting better with the news that started this thread, and for those of us who hoped Tyvaso DPI might be the “shot” in the arm MNKD needed to get over the breakeven hump and become profitable to get access to operating capital on better terms and to be able to do more development and marketing, it finally seems to be materializing. If I was a business development director looking to potentially buy an undervalued company before it became very expensive, now might be the right time.
|
|
|
|
Post by peppy on Dec 21, 2022 8:50:25 GMT -5
THERE IS NO BUY OUT.
Keep typing. What the heck.
|
|
Nothing to do with Mannkind, but rather that deals don't get done with those multiples pretty much regardless (there may be one or two in very weird cases, but this is not sufficiently weird!)
