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Post by cjm18 on Mar 8, 2024 18:42:25 GMT -5
Own afrezza.
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Post by harryx1 on Mar 14, 2024 10:11:19 GMT -5
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Post by alethea on Mar 14, 2024 10:19:42 GMT -5
Great post by Mike C. It reeks of confidence. IMHO, MNKD is firing on all cylinders. Stock price will go up, I think a lot. Maybe weighed down by the Convertibles for a while but that anchor take care of itself. It will expire in a couple years at most. Stock price inexorably going up.  |
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Post by ktim on Mar 14, 2024 13:21:54 GMT -5
I think we shouldn't have any problem going well beyond the conversion price before end of 2026 even with the dilution it would likely entail.
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Post by alethea on Mar 14, 2024 14:05:56 GMT -5
I think we shouldn't have any problem going well beyond the conversion price before end of 2026 even with the dilution it would likely entail. For once I completely agree with you. Maybe I'll buy a lottery ticket today. |
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Post by mnlearner on Mar 14, 2024 14:38:06 GMT -5
"I think we shouldn't have any problem going well beyond the conversion price before end of 2026 even with the dilution it would likely entail." Can someone help me? What is the 'conversion price"  ?? Can anyone explain to me what could happen? Thank you. |
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Post by porkini on Mar 14, 2024 14:52:10 GMT -5
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Post by ryster505 on Mar 14, 2024 15:27:55 GMT -5
Looks like Jeff Kaplan is associated with Deerfield. Maybe this was Mikes “Thanks and farewell” to Deerfield lol |
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Post by prcgorman2 on Mar 14, 2024 15:59:56 GMT -5
"I think we shouldn't have any problem going well beyond the conversion price before end of 2026 even with the dilution it would likely entail." Can someone help me? What is the 'conversion price" ?? Can anyone explain to me what could happen? Thank you. I've seen different numbers quoted so I'll throw out a number I think may well be wrong but it will be within 20 cents of correct. $5.21 is the conversion price (or I'm wrong).
The "conversion" is debt to equity. A "consortium" of investors purchased a $230M MNKD bond. Retirement of the bond is scheduled for December 2026.
Retirement means one of three things: 1) MannKind pays the bond holders $230M in cash 2) The bond holders accept treasury (i.e., not secondary market) shares of MNKD in lieu of cash (which is the conversion part of the "convertible bond") 3) MannKind retires the debt using a combination of shares and cash
The sale of 1% (10% of 10%) of UTHR royalties on Tyvaso DPI to Sagaard for $150M was explained to be for paying off the convertible bonds. (There's also an additional $50M from Sagaard that's possible if UTHR sales of Tyvaso DPI meet certain milestones.)
MannKind is currently sitting with a little more than $300M in cash in the bank. More than enough to cover the $230M in convertible debt and still have a healthy war chest, and there's time to add to that. Some have speculated MannKind will use some of the $300M+ in the bank to pay off the remaining $33M of the MidCap loan and that is possible, and perhaps by December 2026 that can be replenished with operating income with a potential $50M boost from Sagaard.
So we don't know how things will look in December 2026 but they're looking pretty solid at this moment.
Lastly, the December 2026 is the official retirement date for the convertible bonds, but, the debt can potentially be retired sooner using cash, or a combination of cash + equity (shares) based on whatever choice MannKind makes about the mix (if there is a mix). They said they're trying to avoid dilution and they got $150M in cash from Sagaard to pay debt, so I think they've got a good case to make for avoiding dilution.
But, the important point about the retirement of the debt sooner than December 2026 is that the MNKD share price has to be above the "conversion price" for some length of time. It makes you wonder if the debt holders have any incentive to keep the MNKD share price below the conversion price because if they did, it would likely imply the convertible bond debt holders would be shorting MNKD to keep the price depressed. I don't know if that's going on but just the fact that it might be makes me want the price to go above the conversion price long enough for MannKind to pull the trigger and retire the debt and get that threat of shorting removed.
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Post by JEvans on Mar 14, 2024 18:03:35 GMT -5
"I think we shouldn't have any problem going well beyond the conversion price before end of 2026 even with the dilution it would likely entail." Can someone help me? What is the 'conversion price" ?? Can anyone explain to me what could happen? Thank you. I've seen different numbers quoted so I'll throw out a number I think may well be wrong but it will be within 20 cents of correct. $5.21 is the conversion price (or I'm wrong).
The "conversion" is debt to equity. A "consortium" of investors purchased a $230M MNKD bond. Retirement of the bond is scheduled for December 2026.
Retirement means one of three things: 1) MannKind pays the bond holders $230M in cash 2) The bond holders accept treasury (i.e., not secondary market) shares of MNKD in lieu of cash (which is the conversion part of the "convertible bond") 3) MannKind retires the debt using a combination of shares and cash
The sale of 1% (10% of 10%) of UTHR royalties on Tyvaso DPI to Sagaard for $150M was explained to be for paying off the convertible bonds. (There's also an additional $50M from Sagaard that's possible if UTHR sales of Tyvaso DPI meet certain milestones.)
MannKind is currently sitting with a little more than $300M in cash in the bank. More than enough to cover the $230M in convertible debt and still have a healthy war chest, and there's time to add to that. Some have speculated MannKind will use some of the $300M+ in the bank to pay off the remaining $33M of the MidCap loan and that is possible, and perhaps by December 2026 that can be replenished with operating income with a potential $50M boost from Sagaard.
So we don't know how things will look in December 2026 but they're looking pretty solid at this moment.
Lastly, the December 2026 is the official retirement date for the convertible bonds, but, the debt can potentially be retired sooner using cash, or a combination of cash + equity (shares) based on whatever choice MannKind makes about the mix (if there is a mix). They said they're trying to avoid dilution and they got $150M in cash from Sagaard to pay debt, so I think they've got a good case to make for avoiding dilution.
But, the important point about the retirement of the debt sooner than December 2026 is that the MNKD share price has to be above the "conversion price" for some length of time. It makes you wonder if the debt holders have any incentive to keep the MNKD share price below the conversion price because if they did, it would likely imply the convertible bond debt holders would be shorting MNKD to keep the price depressed. I don't know if that's going on but just the fact that it might be makes me want the price to go above the conversion price long enough for MannKind to pull the trigger and retire the debt and get that threat of shorting removed.
Thank you for that explanation of convertible debt, it makes much more sense to me now... But, how could the debt holders theoretically keep share price down |
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Post by prcgorman2 on Mar 14, 2024 22:19:25 GMT -5
Debt holders could keep the price down by shorting the stock expecting to be able to cover with the cash or shares acquired during retirement of the debt. They get interest on the debt too, but that won’t be the only way they try to get value from owning the convertible bond. Keeping the price depressed means they can get more interest because the conversion price isn’t met for the time needed and they can work the stock to make money on volatility. Short to pull the share price down, cover with the money made shorting by buying the stock at the depressed price, let the stock price go back up again, short it again, cover at the depressed price, rinse, repeat. They keep the money that is the difference between what they sold the borrowed shares at, and the replacement cost at the depressed price. And, with money earned shorting and covering, they could also buy extra shares in long positions that then are sold as the price rises in the familiar buy low sell high pattern. There’s ways that can go wrong, and that may be where options come in. That trading cycle isn’t without risk and options may provide a form of insurance. But this is all naive speculation on my part. I don’t actually know this is going on, but in my poor understanding of trading wizardry, it seems plausible.
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Post by anderson on Mar 15, 2024 6:38:05 GMT -5
Think of it this way. MNKD was loaned money at 2.5%. So, the lender gets that till the loan is paid off. Now the lender shorts the stock when the share price is above the conversion price of $5.21, but below the call price which in this case is 130% of the conversion price $6.77. Now they have made another profit and have all their money back to use in another venture. Only risk is if their note gets called, so you want it to stay below the call price $6.77
remember you need to be above the call price for 20 out of 30 days. (note if the lender did not get a chance to short all the shares that they can convert this is a good time to short more). So that is the thesis for the lenders wanting to keep the share price low. The problem the lenders have now is that MNKD has the cash to pay them with instead of issuing shares. So, the question is what if the lender is shorting what is their tolerance for risk.
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Post by peppy on Mar 15, 2024 7:17:47 GMT -5
Think of it this way. MNKD was loaned money at 2.5%. So, the lender gets that till the loan is paid off. Now the lender shorts the stock when the share price is above the conversion price of $5.21, but below the call price which in this case is 130% of the conversion price $6.77. Now they have made another profit and have all their money back to use in another venture. Only risk is if their note gets called, so you want it to stay below the call price $6.77 remember you need to be above the call price for 20 out of 30 days. (note if the lender did not get a chance to short all the shares that they can convert this is a good time to short more). So that is the thesis for the lenders wanting to keep the share price low. The problem the lenders have now is that MNKD has the cash to pay them with instead of issuing shares. So, the question is what if the lender is shorting what is their tolerance for risk. Thank you anderson . I always read what you write carefully because you give information I need. Thank you once again. Outstanding. |
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Post by akemp3000 on Mar 15, 2024 8:33:04 GMT -5
Does this mean Mannkind could crush, or at least seriously hurt some shorts by paying off the debt early? If so, departing shorts should quickly influence a rising share price. Then it seems a rising share price could help offset the resulting lower cash reserve. If so, the higher share price could lead to a much smaller dilution to recover the same amount of cash for reserves. Help me understand this fascinating chess game. MC and Steve Binder seem to know the game well considering what they've accomplished in recent years.
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Post by phdedieu12 on Mar 15, 2024 9:10:29 GMT -5
This is the most interesting thread I have read in a long time, thank you to those bringing knowledge to us laymans
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