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Post by letitride on Mar 15, 2024 9:34:31 GMT -5
There is no reason to pay off the notes early. As the fundamentals of Mannkind continue to improve the shorts will be forced out regardless of the $6.77 conversion, the price will rise above it. Banking on all that cash at 2.5% until 2026 is like pay back for the current price suppression. The tide is turning and they might not be swimming naked, but they could get stripped on the way out. The risk is on them not Mannkind in my opinion.
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Post by prcgorman2 on Mar 15, 2024 11:55:12 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. Your parenthetical note is a really good one!
At last report in the Short Interest thread that @sla55 kindly maintains for the board, MNKD had ~35M shares short. I don't know how many shares the convertible bonds are worth (although I assume that's a published known quantity), playing with some assumed average costs of shares sold short, it would seem very possible that bond holders still have some room to short more. If you are willing to elaborate on why this is a good time to short more, I'd like to know. I assume it is because the MNKD share price is sufficiently far away from the conversion price to have some headroom to react should MNKD share price gain more momentum. But that's just a guess. Also, my memory is if the share price doesn't move above the call price for 20 out of 30 days between now and December 2026, then MannKind has to wait until December 2026 to retire the bonds, even with cash. If that is true (which it may not be), it would seem the shorting lenders could tolerate a pretty big amount of risk. Am I thinking about that correctly? How would the lenders estimate risk? Is the risk entirely the share price above call price for 20 out of 30 days? |
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Post by sayhey24 on Mar 15, 2024 12:11:20 GMT -5
There is no reason to pay off the notes early. As the fundamentals of Mannkind continue to improve the shorts will be forced out regardless of the $6.77 conversion, the price will rise above it. Banking on all that cash at 2.5% until 2026 is like pay back for the current price suppression. The tide is turning and they might not be swimming naked, but they could get stripped on the way out. The risk is on them not Mannkind in my opinion. Why in the world would we pay off a note at 2.5% when we can get 8% on the money? Not only is cash king, we need to start some additional studies with that cash. I know I whine a lot about Big Pharma but the closer MNKD gets to making afrezza SoC in the T1 space BP will once again start throwing the kitchen sink at MNKD. Shorting is one such tool. It will continue. Can you imagine what they would do if Bill starts his T2 study and then CMS steps in with big time money to expand the trial? If you want a pop in the stock forget the shorts. The kids need approval and they need a way to buy afrezza. Bill need's to start his study and then get big time funding. CMS funding his study would really pop the stock. MNKD announcing Saxenda DPI would pop the stock. |
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Post by mnlearner on Mar 16, 2024 10:54:17 GMT -5
Thank you for the kind explanation of the conversion. Makes sense to me. I bought and am holding MNKD because I believe inhaled insulin to be a great thing. I hate needles. I thought it was a 'no brainer' in ~2015 but you now see where the 'no brains' part , really is. I think our time is coming fast because , if, the insulin inhalable is ok ed for children, I think parents would flock to it. Also, IF India allows it we will be golden. Again, Thank you so much.
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Post by neil36 on Oct 28, 2024 15:32:39 GMT -5
Today is the first close above "130% of the conversion price."
We would need nineteen more closes at this level or above over the next thirty days, for MNKD to be allowed to issue shares or pay cash to retire some or all of the convertible note
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Post by prcgorman2 on Oct 28, 2024 15:44:38 GMT -5
Today is the first close above "130% of the conversion price." We would need nineteen more closes at this level or above over the next thirty days, for MNKD to be allowed to issue shares or pay cash to retire some or all of the convertible note Close above for 20 out of 30 trading days... |
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Post by neil36 on Oct 28, 2024 15:46:30 GMT -5
Thank you. Yes, I should have articulated trading days, which takes it out to almost mid December.
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Post by BD on Oct 28, 2024 16:04:37 GMT -5
Thank you. Yes, I should have articulated trading days, which takes it out to almost mid December. The market doesn't "close" on days there isn't trading, so I think I'll give you full credit  |
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Post by celo on Oct 28, 2024 16:06:51 GMT -5
"if the last reported sale price of the Company’s common stock, par value $0.01 per share, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive
trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion
price for the Senior convertible notes on each applicable trading day;"
Must close above 6.76 on December 31st, also.
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Post by peppy on Oct 28, 2024 16:12:56 GMT -5
Today is the first close above "130% of the conversion price." We would need nineteen more closes at this level or above over the next thirty days, for MNKD to be allowed to issue shares or pay cash to retire some or all of the convertible note Close above for 20 out of 30 trading days... *to end at the end of the month. Look at the set up. MNKD could end November above $6.77 for 20 out of 30 trading days. ""if the last reported sale price of the Company’s common stock, par value $0.01 per share, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive
trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion
price for the Senior convertible notes on each applicable trading day;" Must close above 6.76 on December 31st, also." |
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Post by anderson on Oct 28, 2024 17:09:39 GMT -5
"if the last reported sale price of the Company’s common stock, par value $0.01 per share, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the Senior convertible notes on each applicable trading day;"
Hmm to me that sounds more like the 20 out of 30 days can include the last day of the quarter(but not required) and cant roll over the days between quarters. Sort of like those cell phone plans with no roll over minutes.
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Post by BD on Oct 28, 2024 18:02:23 GMT -5
"if the last reported sale price of the Company’s common stock, par value $0.01 per share, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the Senior convertible notes on each applicable trading day;" Hmm to me that sounds more like the 20 out of 30 days can include the last day of the quarter(but not required) and cant roll over the days between quarters. Sort of like those cell phone plans with no roll over minutes. Yes. I think the "last day of the quarter" confusion comes from parsing the grammar incorrectly. In this, the "ending on and including..." refers to the 'period of 30 consecutive days'. It's NOT saying that the last trading day HAS to be one of the 20. |
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Post by radgray68 on Oct 29, 2024 11:04:39 GMT -5
Still, worst case scenario, after 100% increase in price this last year we suffer 15% dilution. We then keep our cash and do some stock buybacks if we’re still undervalued.
With all that cash free, profitable businesses and a robust pipeline, I’m not sure the 15% dilution is worth worrying about.
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Post by cjm18 on Oct 29, 2024 20:47:51 GMT -5
83% short today. Most volume was at $7 in the morning. Bond holders shorting?
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Post by daisyz on Oct 29, 2024 21:15:00 GMT -5
83% short today. Most volume was at $7 in the morning. Bond holders shorting? How does a stock go up w 83% shorting? |
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