Understanding MNKD Stock Price Volatility
Jun 22, 2015 17:32:09 GMT -5
otherottawaguy, thekindaguyiyam, and 3 more like this
Post by BD on Jun 22, 2015 17:32:09 GMT -5
The following post was made by dudley on June 22, 2015. I think it captures the essence of the stock volatility issue as it applies to all stocks, but as a biotech, MNKD gets it in amplified form. This post deserves to be easy to find, so here it is.
-BD
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Al Mann :"In my view it will affect so many more people. If we can combine Afrezza with better basal insulins the combination will make an enormous difference that will certainly affect far more people than we could ever imagine. Indeed, some key opinion leaders are saying that Afrezza therapy in early stage type 2 diabetes should slow, probably stop and maybe even reverse type 2 diabetes."
Afrezzaguy and Spiro are validating and documenting this phenomenon already.
Sam, Eric and others are documenting non-diabetic numbers and saying it has effectively been a cure for them, allowing them to live like non-diabetics.
What is a medication worth that is proving to be a virtual cure for BOTH T1 and T2 diabetics? What about the quality of life and peace of mind for hundreds of millions of people around the world? What about the untold billions saved in medical costs for people who no longer have to deal with the terrible complications resulting from this unfortunate disease?
We are seeing probably the most significant development EVER in the history of treating diabetes. The stock price comes nowhere near reflecting this - just as Netflix stock price in 2008 ($34) did not reflect the value that streaming video and that subscription model would bring to the company (stock is $672.70 as I write this - 2,000% gain in 7 years). The streaming video model was revolutionary, everyone KNEW it was revolutionary, but the "market" can be stubborn - particularly when there are so many players with options, short positions etc. that need to be protected.
Market makers by themselves play games all day long with 100 share trades back and forth, walking the stock down to take out stop losses etc. I have seen a stock move 1/2 point on a few 100 share trades and then get yanked back up again after hitting that stop loss and scooping up those shares on the cheap. On a daily basis the stock price is hostage to these forces and is completely removed from the actual fundamental value of the business. EVERY share of MNKD you buy goes through a market maker somewhere - that is how the NASDAQ system is set up. Market makers run a business and the intention is to make money for THEMSELVES, not you. They do everything they can to get their "inventory" as cheaply as they can, then gladly sell it at higher prices once the demand for the shares picks up. It is very important to understand this. Most novice investors naively believe they are buying their shares from someone just like them who lives in Illinois and decides to sell their shares today. Market makers run the bid and ask all day, every day. Endless games on a daily basis and that is what we are seeing now.
That is the reason you see, almost without fail - a stock price move up and down to the tune of 50% each and every year. Check it out - pick ANY stock you can think of and look at the 52 week high and low. MNKD 52 week high $11.48 52 week low $3.46. NFLX 52 week high $692.79, low $315.54. GM 52 week high $38.99, low $28.82. You can play this game all day long and see it is true with EVERY stock, almost 100% of the time. How can this be? The underlying true value of the business does not change - the value of the assets on the balance sheet, customers, products, - stays constant but the stock price moves 50%? Makes no sense UNTIL you understand how the game is played. This is why I no longer worry about the daily stock price of a stock I believe in for the long term - I KNOW that on any given day it is just the meandering of the market makers and has absolutely nothing to do with the intrinsic value of the company. If the stock price fully reflected the value of the business how can anyone ever explain a buyout at a 50% premium to the closing stock price the day before? How can one explain the constant 50% fluctuation between 52 week highs/lows? The market can be hugely distorted at any point in time based on news stories (a tiny country like Greece can send the whole global stock market into a tailspin) etc. that have NOTHING to do with the value of an individual company.
The game is even more distorted in an information vacuum such as we are currently experiencing with MNKD. Nobody really KNOWS yet if the promise will be fulfilled, just as nobody really knew in 2008 if streaming video was going to be the gigantic phenomenon it proved to be. Just ask yourself "What is a product worth that is showing the promise of being a virtual cure for a diabetic population of around 400 million and growing?" Realize that this stock price does not even remotely approach that value even at 10 times the current price. DO NOT let the market makers and their crooked pals shake you out. Patience will be rewarded - this story will play out over years, not months, certainly not weeks.
I am holding on to every single share, I have NO stop losses because that is only tempting the MM's to move the stock down to steal those shares.
-BD
-------------------
Al Mann :"In my view it will affect so many more people. If we can combine Afrezza with better basal insulins the combination will make an enormous difference that will certainly affect far more people than we could ever imagine. Indeed, some key opinion leaders are saying that Afrezza therapy in early stage type 2 diabetes should slow, probably stop and maybe even reverse type 2 diabetes."
Afrezzaguy and Spiro are validating and documenting this phenomenon already.
Sam, Eric and others are documenting non-diabetic numbers and saying it has effectively been a cure for them, allowing them to live like non-diabetics.
What is a medication worth that is proving to be a virtual cure for BOTH T1 and T2 diabetics? What about the quality of life and peace of mind for hundreds of millions of people around the world? What about the untold billions saved in medical costs for people who no longer have to deal with the terrible complications resulting from this unfortunate disease?
We are seeing probably the most significant development EVER in the history of treating diabetes. The stock price comes nowhere near reflecting this - just as Netflix stock price in 2008 ($34) did not reflect the value that streaming video and that subscription model would bring to the company (stock is $672.70 as I write this - 2,000% gain in 7 years). The streaming video model was revolutionary, everyone KNEW it was revolutionary, but the "market" can be stubborn - particularly when there are so many players with options, short positions etc. that need to be protected.
Market makers by themselves play games all day long with 100 share trades back and forth, walking the stock down to take out stop losses etc. I have seen a stock move 1/2 point on a few 100 share trades and then get yanked back up again after hitting that stop loss and scooping up those shares on the cheap. On a daily basis the stock price is hostage to these forces and is completely removed from the actual fundamental value of the business. EVERY share of MNKD you buy goes through a market maker somewhere - that is how the NASDAQ system is set up. Market makers run a business and the intention is to make money for THEMSELVES, not you. They do everything they can to get their "inventory" as cheaply as they can, then gladly sell it at higher prices once the demand for the shares picks up. It is very important to understand this. Most novice investors naively believe they are buying their shares from someone just like them who lives in Illinois and decides to sell their shares today. Market makers run the bid and ask all day, every day. Endless games on a daily basis and that is what we are seeing now.
That is the reason you see, almost without fail - a stock price move up and down to the tune of 50% each and every year. Check it out - pick ANY stock you can think of and look at the 52 week high and low. MNKD 52 week high $11.48 52 week low $3.46. NFLX 52 week high $692.79, low $315.54. GM 52 week high $38.99, low $28.82. You can play this game all day long and see it is true with EVERY stock, almost 100% of the time. How can this be? The underlying true value of the business does not change - the value of the assets on the balance sheet, customers, products, - stays constant but the stock price moves 50%? Makes no sense UNTIL you understand how the game is played. This is why I no longer worry about the daily stock price of a stock I believe in for the long term - I KNOW that on any given day it is just the meandering of the market makers and has absolutely nothing to do with the intrinsic value of the company. If the stock price fully reflected the value of the business how can anyone ever explain a buyout at a 50% premium to the closing stock price the day before? How can one explain the constant 50% fluctuation between 52 week highs/lows? The market can be hugely distorted at any point in time based on news stories (a tiny country like Greece can send the whole global stock market into a tailspin) etc. that have NOTHING to do with the value of an individual company.
The game is even more distorted in an information vacuum such as we are currently experiencing with MNKD. Nobody really KNOWS yet if the promise will be fulfilled, just as nobody really knew in 2008 if streaming video was going to be the gigantic phenomenon it proved to be. Just ask yourself "What is a product worth that is showing the promise of being a virtual cure for a diabetic population of around 400 million and growing?" Realize that this stock price does not even remotely approach that value even at 10 times the current price. DO NOT let the market makers and their crooked pals shake you out. Patience will be rewarded - this story will play out over years, not months, certainly not weeks.
I am holding on to every single share, I have NO stop losses because that is only tempting the MM's to move the stock down to steal those shares.
