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Post by Thundersnow on Jan 20, 2024 11:09:56 GMT -5
The big question is: How long does ANY company's stock trade at 3X their cash on hand? It's completely blowing my fundamentals-loving mind right now. a) Our debt can be serviced with our current cash flow. Major biggie, IMHO b) We've got 3 FDA approved products, a couple of them growing double digits. One of them, Afrezza, is being PROPERLY evaluated for the first time. c) In just 6 months we'll have TWO MORE pipeline products in Phase 3 development. Both mostly de-risked, mind you, because we know they work. And, don't forget their likely orphan/maybe fast-track status. d) We've already got like 14% of the float sold short and needing to be repurchased. So, ruminate all you want to on the fine print of the current not-very-toxic debt. However, we have a spring-loaded "BEAR" trap (get the clever double entendra, lol) which is ready to go off here and the two ongoing endocrine trials are metaphorically poking at the trap with a stick. Any time now and.....SNAP!!!! Have a great weekend everyone I AGREE 100% with everything you said. Then tell me why is MNKD at $3.36? |
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Post by Thundersnow on Jan 20, 2024 11:10:43 GMT -5
It's been a great conversation with everyone. Have a good weekend and enjoy FOOTBALL!!!
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Post by agedhippie on Jan 20, 2024 11:16:07 GMT -5
They probably would, a better question is why MNKD would want to pay it early. As they pointed out in the call they can put the $150M in the bank and collect on the difference between the 2.5% they are paying, and the higher amount they are being paid - it's free money. If the debt holders then have incentive to be paid sooner rather than later, what actions might they take to precipitate that? They cannot convert the notes because because the strike price if far higher than the current price so they would take a huge loss so they would have to amend the agreement. I am not sure that they would want to do this though because these are almost certainly part of a ladder. The ladder gives them certainty about their cashflow and that's what these firms are all about. Early payment would land them with a gap in their revenue from the loss of the interest stream, and a pile of cash with nowhere to place it. Counterintuitively unexpected piles of cash are a bad thing because it has to be placed and that takes time. |
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Post by agedhippie on Jan 20, 2024 11:39:57 GMT -5
It might be free money but if the stock price is stuck below $4 then what's the purpose? MIKE is supposed to create SHAREHOLDER VALUE. The only way to do that is to have the share price higher. With all of the existing good news out about MNKD the stock is at $3.36. Why is it at $3.36......The SHORTS. Who are the SHORTS??? The Convertible Bondholders. That's why they need to get rid of (or pay down) the debt. MNKD has an annual run rate of $200M now and any small cap pharma company has a sales multiple of 10x which means their market cap should be at least $2 Billion. It's at $907M and you're telling me the SHORTS (i.e. bondholders) are not keeping it down? And there is no momentum in a higher stock price or even a SHORT SQUEEZE. MNKD has to get rid of the SHORTS. It's not the shorts, but people who believe it is are never going to agree. If shorts were a real problem the cost of borrowing stock would be far higher. MNKD is priced as it is because it's seen as a supplier for pharma, Technosphere, with a single customer. That's a big problem and reduces the value because it makes MNKD's revenue dependent on UTHR's ability to grow Tyvaso-DPI. Before someone says, "but what about Afrezza, it's a drug" look at the price before the UTHR deal that's the value the market attaches to Afrezza. |
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Post by cjc04 on Jan 20, 2024 11:49:23 GMT -5
...They may need to reposition their strategy due to that news, and they have until March 6th until it is an actual threat to them with the possibility of the notes being paid at any moment (and they wouldn’t want to get caught with short positions, and now know there won’t be shares from MNKD to cover any short positions, as you point out.... To be clear on this, MNKD can only redeem the notes under certain very specific conditions that are currently nowhere near met. They can redeem the share price has been over $6.90 for 20 trading days so hardly at any moment even assuming they are shorting. MannKind may redeem for cash all or any portion of the notes (subject to certain limitations), at its option, on or after March 6, 2024 and prior to the 36th scheduled trading day immediately preceding the maturity date, if the last reported sale price of MannKind’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period So now you’re saying that MNKD doesn’t even have the ability to pay off the debt with their cash on hand on March 6 because of the restrictions, particularly share price. And yet you say that the note holders have no incentive at all to suppress the share price and keep it stuck in this range. They did not loan a struggling company funds to collect 2.5%, they did it because they were given the ability to make much more money hedging, shorting, and controlling the share price. It’s clear you’re a smart guy Aged, you’re talking all sides of your mouth. The truth is, you have no clue any of these parties are up to or what their real intentions are. WHY would such restrictions even exist? What kind of debt limits accompany from being able to pay it back, and actually roots against the company to grow in value so that it can NOT pay the debt off? TOXIC DEBT ! |
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Post by sayhey24 on Jan 20, 2024 14:43:59 GMT -5
For Mike to survive the next 2 years he needs to figure out a plan for afrezza. Its too expensive and is not getting insurance coverage. I think he has already figured out V-Go is a no go. I love the line from his JP Morgan slide - "Discipline selling of V-Go in secondary position to maintain core prescribing base" . Last year afrezza was for T1 market and V-Go was for T2. Now V-Go is in a secondary position. I would say thats progress. If things stay steady state and afrezza is still too expensive and still has no insurance coverage when the great results come in from Cipla and the kids, afrezza will still have little sales. I would think it will be hard for Mike to survive at that point. He will have trial data saying he has the greatest advance in diabetes care since Banting and Best but he has not figured out a way to get BP's boot off MNKDs throat. He is also sitting on a potential block buster in the GLP1 market but was not willing to poke the bear. I could be wrong but I don't think price is the issue. Afrezza is pulling in 70-80% margins. They could easily lower the ASP to earn more revenues. I honestly believe it's the DATA/STUDIES. Most Doctors (like 90%) are PROGRAMMED to be GUIDED by Studies and Publications. They have a PROTOCOL and that's what they follow. Just look at the treatment for Diabetes. TREAT TO FAIL......We've known for 7 years now and published "articles" (Not Studies) that say if you take Afrezza at first diagnosis for Type 2 you can reverse diabetes. You can actually help your pancreas regenerate new beta cells BUT Doctors will now go against the PROTOCOL and it could be bc of insurance coverage. MNKD has elasticity in Afrezza and apparently they have chosen not to adjust. I feel bad for the salespeople. It makes their job a lot harder which we saw with the recent layoffs. I know Mike is chomping at the bit for the PEDS Readout. This will give the markets some insight as to the progress of the trial. And I believe his trying to time everything. CV Debt Window OPENS (March) and hopefully PEDS Readout in April and then the ATTD and ADA in May & June. Hoping for a good 2024. Before we can have broad based sales and it makes sense to send out an army of sales reps, 3 things need to be fixed 1. The label 2. The SoC 3. The cost We can not fix the label nor the SoC until we have the Cipla results and the kids results. I am assuming both will be great. We are not going to get insurance coverage until we have fixed the SoC. We are not fixing either the label nor SoC in 2014. This will take 2 more years. The only doctors who are going to actively prescribe afrezza during the next 2 years are those that really understand afrezza and are ignoring the label and have developed their own SoC and are willing to fill out the pre auth and other paperwork for insurance. These are the key accounts and VDex. VDex for example knows how to dose and they have developed their own SoC. What stops VDex from prescribing afrezza today is cost. Their patients can not afford it. The only thing which MNKD can do in 2014 to directly impact scripts is price. If Mike does nothing we will continue to see slow script growth. Doing nothing is the low risk approach and we are basically in a holding pattern for 2 years. This is the current plan and the hope is we can get proper changes in the 2016 SoC which would then provide the justification for insurance coverage. Without having a significant base before 2016 is the risk we saw this year when inhaled insulin was put in parentheses in the SoC. |
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Post by cretin11 on Jan 20, 2024 15:20:45 GMT -5
MNKD has an annual run rate of $200M now and any small cap pharma company has a sales multiple of 10x which means their market cap should be at least $2 Billion. It's at $907M and you're telling me the SHORTS (i.e. bondholders) are not keeping it down? And there is no momentum in a higher stock price or even a SHORT SQUEEZE. MNKD has to get rid of the SHORTS. It's not the shorts, but people who believe it is are never going to agree. If shorts were a real problem the cost of borrowing stock would be far higher. MNKD is priced as it is because it's seen as a supplier for pharma, Technosphere, with a single customer. You are correct aged. It used to be a common theme here for folks to blame share price on shorts, now some still do but most have learned better. It’s the opposite cause/effect relationship. Yes, shorts have fed themselves well on MNKD but it’s for the reasons you mentioned. Lack of success at developing multiple robust revenue streams leaves us priced where we are, with evidence indicating our own execs believe we are priced appropriately (despite MC’s rhetoric to the contrary). |
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Post by agedhippie on Jan 20, 2024 15:32:16 GMT -5
... What kind of debt limits accompany from being able to pay it back, and actually roots against the company to grow in value so that it can NOT pay the debt off? ... Welcome to the world of corporate bonds. |
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Post by cjm18 on Jan 20, 2024 15:49:50 GMT -5
To be clear on this, MNKD can only redeem the notes under certain very specific conditions that are currently nowhere near met. They can redeem the share price has been over $6.90 for 20 trading days so hardly at any moment even assuming they are shorting. MannKind may redeem for cash all or any portion of the notes (subject to certain limitations), at its option, on or after March 6, 2024 and prior to the 36th scheduled trading day immediately preceding the maturity date, if the last reported sale price of MannKind’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period So now you’re saying that MNKD doesn’t even have the ability to pay off the debt with their cash on hand on March 6 because of the restrictions, particularly share price. And yet you say that the note holders have no incentive at all to suppress the share price and keep it stuck in this range. They did not loan a struggling company funds to collect 2.5%, they did it because they were given the ability to make much more money hedging, shorting, and controlling the share price. It’s clear you’re a smart guy Aged, you’re talking all sides of your mouth. The truth is, you have no clue any of these parties are up to or what their real intentions are. WHY would such restrictions even exist? What kind of debt limits accompany from being able to pay it back, and actually roots against the company to grow in value so that it can NOT pay the debt off? TOXIC DEBT ! It’s not a hedge if they short below the conversion price. They are shorting at their own risk now if they are shorting. Would they short the stock at 7 dollars if they knew mannkind was just going to repay the loan in cash instead of convert? We don’t know if the two parties will renegotiate the agreement. The original announcement does not go into every little detail of the original agreement. Not sure if those other details are made public. It’s a low interest rate due to the restrictions that seem to favor the lender. It’s less toxic now bc mannkind has the cash to avoid conversion. |
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Post by cjm18 on Jan 20, 2024 16:03:26 GMT -5
Mannkind can’t pay this back until 12/1/25 at the earliest unless the stock goes to the moon.
“Before December 1, 2025, holders will have the right to convert their notes only upon the occurrence of certain events. From and after December 1, 2025, until the close of business on the business day immediately preceding the maturity date, holders will have the right to convert all or any portion of their notes at their election. Upon conversion, MannKind will pay or deliver, as the case may be, cash, shares of MannKind’s common stock or a combination of cash and shares of MannKind’s common stock, at its election. The initial conversion rate is 191.8281 shares of common stock per $1,000 principal amount of notes, which represents an initial conversion price of approximately $5.21 per share of common stock. The initial conversion price represents a premium of approximately 30% over the last reported sale of $4.01 per share of MannKind’s common stock on March 1, 2021. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events.
MannKind may not redeem the notes prior to March 6, 2024. MannKind may redeem for cash all or any portion of the notes (subject to certain limitations), at its option, on or after March 6, 2024 and prior to the 36th scheduled trading day immediately preceding the maturity date, if the last reported sale price of MannKind’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which MannKind provides notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.”
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Post by cretin11 on Jan 20, 2024 16:23:07 GMT -5
That’s how I read it too, cjm (though it’s sad that we now call that price level “to the moon”).
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Post by cjm18 on Jan 20, 2024 16:27:47 GMT -5
That’s how I read it too, cjm (though it’s sad that we now call that price level “to the moon”). Haha true. The goal from the conference call in early January is no convertible debt as of March 2026. |
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Post by agedhippie on Jan 20, 2024 18:46:45 GMT -5
It's worth circling back to a post limo posted earlier in this thread, specifically this image:  These are the people who own those MidCap notes although when I looked there were 23 so some have been traded since that snapshot or new 13F filings. You can take the CUSIP number and find information about what it is trading at here: www.finra.org/finra-data/fixed-income/bond?cusip=56400PAQ5&bondType=CA |
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Post by anderson on Jan 20, 2024 22:24:19 GMT -5
It's worth circling back to a post limo posted earlier in this thread, specifically this image: These are the people who own those MidCap notes although when I looked there were 23 so some have been traded since that snapshot or new 13F filings. You can take the CUSIP number and find information about what it is trading at here: www.finra.org/finra-data/fixed-income/bond?cusip=56400PAQ5&bondType=CAThat CUSIP is the senior convertible notes, not the midcap credit facility. Midcap is capped at 8.25% and is floor is 6.25%. After looking at the trade history of those notes www.finra.org/finra-data/fixed-income/trade-history?cusip=56400PAQ5&bondType=CA it looks like MNKD could pick up some of those bonds at 1% discount if they are lucky. If I were MNKD I would have an open order at a discount and buy them back a million at a time. As you can see from the trades on the 18th some of the bond owners are willing to part with 1%-2.125% to get their money back, probably to roll it into something with higher yields. |
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Post by prcgorman2 on Jan 22, 2024 8:16:48 GMT -5
It's worth circling back to a post limo posted earlier in this thread, specifically this image: These are the people who own those MidCap notes although when I looked there were 23 so some have been traded since that snapshot or new 13F filings. You can take the CUSIP number and find information about what it is trading at here: www.finra.org/finra-data/fixed-income/bond?cusip=56400PAQ5&bondType=CAThat CUSIP is the senior convertible notes, not the midcap credit facility. Midcap is capped at 8.25% and is floor is 6.25%. After looking at the trade history of those notes www.finra.org/finra-data/fixed-income/trade-history?cusip=56400PAQ5&bondType=CA it looks like MNKD could pick up some of those bonds at 1% discount if they are lucky. If I were MNKD I would have an open order at a discount and buy them back a million at a time. As you can see from the trades on the 18th some of the bond owners are willing to part with 1%-2.125% to get their money back, probably to roll it into something with higher yields. Opportunity to optimize. I like it. Not sure how difficult that would be for MNKD to execute using operating income, but identifying it is very good. Any thoughts on total opportunity or trend of availability over time? i.e., will the opportunity improve or diminish and by how much over what time frame? (If I were you I might be annoyed by such a question, so apologies in advance.) |
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