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Post by prcgorman2 on Jan 4, 2024 10:44:17 GMT -5
In overly simplistic terms, if I sell my house for $1M, my net worth does not increase. Mnkd collected 150M but gave away future earnings of more than 150M. To continue uvula’s good analogy, what uvula does with that $1M will have a bearing on his net worth going forward. Will he make good decisions to maximize that $1M and turn it into more? How much confidence do we have in uvula’s decision making, based on past performance? Excellent commentary cretin11.
Start with a small pharma pipeline company with a single not-very-well selling FDA-approved product with old packaging from a previous marketing company, on the brink of bankruptcy, freshly coming off a 1:5 reverse stock split, with a mountain of toxic debt, nearly shorted into oblivion, and then make them completely solvent and marginally profitable in 7 years with 3 FDA-approved products, a small active pipeline, a reliable Future Cash Flow valued in 9% of multiple billions and 1% of the FCF in cash and a clear path to pay off $271M in debt and be debt-free in 2 years.
If you can do that, I'd say your performance was very good.
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Post by hellodolly on Jan 4, 2024 10:53:35 GMT -5
To continue uvula’s good analogy, what uvula does with that $1M will have a bearing on his net worth going forward. Will he make good decisions to maximize that $1M and turn it into more? How much confidence do we have in uvula’s decision making, based on past performance? Excellent commentary cretin11.
Start with a small pharma company with a single not-very-well selling FDA-approved product with old packaging from a previous marketing company, on the brink of bankruptcy, with a mountain of toxic debt, nearly shorted into oblivion, and then make them completely solvent and marginally profitable in 7 years with 3 FDA-approved products, a small active pipeline, a reliable Future Cash Flow valued in 9% of multiple billions and 1% of the FCF in cash and a clear path to pay off $271M in debt and be debt-free in 2 years.
If you can do that, I'd say your performance was very good.
To continue prcgorman2 good analogy...and produce a return that beat the S&P three out of the last four years. |
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Post by prcgorman2 on Jan 4, 2024 11:07:32 GMT -5
Excellent commentary cretin11.
Start with a small pharma company with a single not-very-well selling FDA-approved product with old packaging from a previous marketing company, on the brink of bankruptcy, with a mountain of toxic debt, nearly shorted into oblivion, and then make them completely solvent and marginally profitable in 7 years with 3 FDA-approved products, a small active pipeline, a reliable Future Cash Flow valued in 9% of multiple billions and 1% of the FCF in cash and a clear path to pay off $271M in debt and be debt-free in 2 years.
If you can do that, I'd say your performance was very good.
To continue prcgorman2 good analogy...and produce a return that beat the S&P three out of the last four years. And let's not forget two of those four years were during the worst global pandemic in a century and where MNKD salespeople were effectively locked out of doctors offices for about half of it. Could be the CEO's performance at MannKind, their doctorate in pharma, and an MBA from Wharton are representative of a good brain and hard work. I'd say there is a pretty decent chance the word "epic" may actually apply (in a good way) to MNKD management performance in 2 more years looking back on the previous 9 years. |
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Post by cretin11 on Jan 4, 2024 11:15:30 GMT -5
If uvula has a history of making good decisions with his money, then one would expect people to invest in uvula and thus uvula's share price would rise. Especially when uvula sells his house for $1M, because investors would expect uvula to turn that million into many more.
If i've seen uvula in the past come into some money and then quickly buy a sports car, start eating at the finest restaurants and hand $$$ out to his buddies, then I might hesitate to invest in uvula after he sells his house for $1M, being unsure how he will behave with that cash infusion.
But the people best situated to gauge how well uvula will handle the cash infusion are those closest to uvula (aka uvula's insiders) and of course uvula himself. So if I see uvula and uvula's insiders invest heavily in uvula after his $1M house sale, then it'll give me confidence that uvula is severely undervalued.
Don't let us down, uvula!
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Post by prcgorman2 on Jan 4, 2024 11:51:41 GMT -5
If uvula has a history of making good decisions with his money, then one would expect people to invest in uvula and thus uvula's share price would rise. Especially when uvula sells his house for $1M, because investors would expect uvula to turn that million into many more. If i've seen uvula in the past come into some money and then quickly buy a sports car, start eating at the finest restaurants and hand $$$ out to his buddies, then I might hesitate to invest in uvula after he sells his house for $1M, being unsure how he will behave with that cash infusion. But the people best situated to gauge how well uvula will handle the cash infusion are those closest to uvula (aka uvula's insiders) and of course uvula himself. So if I see uvula and uvula's insiders invest heavily in uvula after his $1M house sale, then it'll give me confidence that uvula is severely undervalued. Don't let us down, uvula! Oh, I see where you're going with this. Your proof MNKD is a good investment is dependent on whether the CEO earns only a salary (no compensation with RSUs) and invests a bunch of his salary into the stock of the company he works for, but that by itself is not good enough, because your proof MNKD is a good investment also requires other MNKD executives (all or just some?) follow the same model. Hey, you do you. |
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Post by centralcoastinvestor on Jan 4, 2024 12:15:00 GMT -5
Using the $1 Million house analogy. How does the market know it’s worth $1 Million? What if the market views the house as only being worth $200,000. Part of the job of the owner is to help the market understand the real value of the house. By selling a small part of the house to a reputable buyer helps establish what the true value of the house is. The Sagard deal helps the market understand how undervalued the current market cap of MannKind is by showing the value over time of the Tyvaso DPI money stream.
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Post by cretin11 on Jan 4, 2024 12:25:14 GMT -5
Agree central, if the market previously viewed uvula’s house as worth $200K but then he sells it for $1M, we would expect uvula’s market cap to go way up, as much as 5X! On the other hand, if uvula’s market cap only went up a little bit or hardly at all, then that would tell us a lot about the market’s confidence (or lack thereof) in uvula’s plans to use that $1M.
But again, one would expect uvula and uvula’s insiders to be in a good position to evaluate those things.
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Post by longliner on Jan 4, 2024 12:29:09 GMT -5
I hate to state the obvious, but can someone please explain how collecting $150 million barely improved the SP? I see arguments of best how that money should be spent. But that can't be the core issue suppressing the SP can it.... Regardless, if you simply replace MNKD with any other 4 letter company on the NASDAQ and this company collects $150 million, the SP should increase. 150 to 200 million is the first clearly articulated value of MNKD's UTHR partnership. Remember the 80's when corporate raiders would buy a company and sell it's assets because the sum of it's parts were worth more than it's share price? This blows the $7 per share buyout to pieces (for anyone who might state such silliness) Cool place to be a long cppoly.  |
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Post by letitride on Jan 4, 2024 14:28:46 GMT -5
The house analogy is perfect as we sat on the edge of bankruptcy Mike sold the house then leased it back and even got UTHR to help build it out for more production. Now were profitable and have UTHR building another house just like the one we sold so they can continue to produce. When Mike buys ours back to produce our own pipeline while UTHR pays us royalties from the one they built. So at this point I got to say I trust Mike to make great decisions as he pays for his shares with his talent. All the armchair second guessing of how Mike could have should have or would have done better is just noise from far to many people talking about what the one is doing that they are clearly not doing.
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Post by Thundersnow on Jan 4, 2024 15:00:48 GMT -5
So basically the $150MM from Sagard is a LOAN. Sagard will earn annual interest but not more than the $150MM. Sagard will will be paid quarterly from the 1% Royalty.
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Post by biffn on Jan 4, 2024 15:08:23 GMT -5
So basically the $150MM from Sagard is a LOAN. Sagard will earn annual interest but not more than the $150MM. Sagard will will be paid quarterly from the 1% Royalty. A huge difference being that it’s not a loan, but a sale. it’s not a debt transaction, but a revenue transaction. One where the rights purchaser is getting a favorable discount against future cash flow. |
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Post by prcgorman2 on Jan 4, 2024 15:11:03 GMT -5
The house analogy is perfect as we sat on the edge of bankruptcy Mike sold the house then leased it back and even got UTHR to help build it out for more production. Now were profitable and have UTHR building another house just like the one we sold so they can continue to produce. When Mike buys ours back to produce our own pipeline while UTHR pays us royalties from the one they built. So at this point I got to say I trust Mike to make great decisions as he pays for his shares with his talent. All the armchair second guessing of how Mike could have should have or would have done better is just noise from far to many people talking about what the one is doing that they are clearly not doing. You make an excellent point letitride. RSUs are not a gift. They're compensation. They're earned and often vest on a schedule to promote retention. And if you're an "in the know" executive, there are often blackout and/or other restrictions on when the shares can be sold. e.g., MC's last sale was pre-registered. An Employee Stock Purchase Plan can be a good thing but there were many years when my shares purchased in the ESPP sold as soon as they deposited into my account to ensure benefit from the purchase discount. I never bought shares in the companies I worked for on the open market. I expect that is common. It makes me wonder whether the people who espouse executives should buy company stock on the open market have ever done so themselves? |
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Post by BD on Jan 4, 2024 15:17:47 GMT -5
I think it's about optics, not necessarily to maximize return for the insiders who buy. I totally cannot speak from the perspective of a public company insider (I'm an insider of BD Inc. and that's about it) but if I were one and I had the opportunity to telegraph my confidence in my company by paying market price for a few shares and give the shareholders something positive to think about, knowing the pieces were falling into place for a nice ramp up in sentiment and value so it wouldn't actually cost me anything (probably the opposite), why the hell would I choose NOT to do it?
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Post by cretin11 on Jan 4, 2024 15:40:06 GMT -5
I think it's about optics, not necessarily to maximize return for the insiders who buy. I totally cannot speak from the perspective of a public company insider (I'm an insider of BD Inc. and that's about it) but if I were one and I had the opportunity to telegraph my confidence in my company by paying market price for a few shares and give the shareholders something positive to think about, knowing the pieces were falling into place for a nice ramp up in sentiment and value so it wouldn't actually cost me anything (probably the opposite), why the hell would I choose NOT to do it? Seems so simple. In fact it's commonly accepted by the investment community. Yet i'm amazed by the lengths some go to espouse convoluted theories against it. Fascinating. |
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Post by prcgorman2 on Jan 4, 2024 15:47:19 GMT -5
I think it's about optics, not necessarily to maximize return for the insiders who buy. I totally cannot speak from the perspective of a public company insider (I'm an insider of BD Inc. and that's about it) but if I were one and I had the opportunity to telegraph my confidence in my company by paying market price for a few shares and give the shareholders something positive to think about, knowing the pieces were falling into place for a nice ramp up in sentiment and value so it wouldn't actually cost me anything (probably the opposite), why the hell would I choose NOT to do it? Executives who've had those opportunities and made the choice would need to answer for themselves, but if it was me, I would be annoyed anyone thought I should spend my hard earned salary so that they could feel good about the results of the work I and my colleagues were doing. The proof is in the pudding, is the old saying.
And how much and how often do shares have to be bought for the "optics" to be good and positively influence other investors enough to make it worth it?
I would not want to have to tie up a material portion of my salary so that my company share price performance only potentially improved. And if I did, for how long?
MNKD isn't paying dividends (yet) so it's not like execs get a return on their investment unless they sell the shares. When do the execs get to sell shares? From what I've seen on this board, selling any shares is not popular.
Another old saying is money talks and BS walks, and to me, "optics" has always sounded more like the latter than the former.
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