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Post by dudley on Jul 29, 2015 10:27:22 GMT -5
I don't think I have much of a problem with what they did. The dilution is minimal, 3% to 4% at most. The price down 7% is clearly an over reaction, especially when you consider that an unknown is now resolved. I do have two big concerns about the way this happened though. First and most concerning, is reconciling this with Matt's repeated "no dilution" comments. Not good. Second, it's obvious to me that this information should have been released last night so that shareholders (and the market) could digest it. Instead, we're left to react in part on emotion, without carefully considering the release, knowing that manipulators have the upper hand because the timing gives them the advantage. "First and most concerning, is reconciling this with Matt's repeated "no dilution" comments. Not good." This is patently untrue. Matt has repeatedly stated There would be no SECONDARY issued to redeem the notes. These are convertible notes and by the very definition there would HAVE to be dilution when they were converted into common shares and that has always been the case. The best case scenario would have been ALL the notes were converted at or above the $6.80 price thereby minimizing the additional shares issued in the conversion. That did not happen obviously but this is far from a bad outcome. Yes, there will be another 12 million or so shares outstanding (ballpark figure, hard to be precise with the formulas) from those exchanging their shares but that dilution factor was going to be there regardless once they converted, just at higher prices and slightly lower share count issued. Now they get to keep $57 million in cash, that debt disappears from the balance sheet, and they save over $3 million a year in interest costs. Furthermore the short interest should drop by approximately the same number as the new shares issued because undoubtedly the new share owners have already shorted those shares in anticipation of getting the new shares in the conversion and using those shares to cover their short. Not the best possible deal for MNKD but definitely a decent outcome. Matt did exactly what he should - cleared out a big portion of the debt at reasonable terms, allowing MNKD to retain a substantial amount of cash while strengthening the balance sheet nicely. He also fulfilled his promise of no secondary dilution, period. |
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Post by tripoley on Jul 29, 2015 10:32:06 GMT -5
The point is not how " minimal". The point is Matt flat out destroyed whatever credibility he has left. He was asked on multiple occasions and confidently stated the multiple options at his disposal while reiterating no dilution. Looked me right in the eye at the shareholder meeting. How can we believe anything that comes out of their mouths? So happy I figured out trading this is more profitable than holding it. This is what Matt said at the GS conference: "People talk about, worry about dilution and so forth. And I have a said couple of times publicly, one thing I can virtually guarantee we won’t do is the marketed secondary offering. That doesn’t mean there might not be some equity components somewhere down the road. It’s not going to be in a way that those shares would be readily made available to somebody who is a short of stock, just hypothetically. I mean, a convert is dilutive too, it just a matter of when it a dilutive will occur, does it occur immediately or does it occur when they convert it? I think the dilution from these instruments already have been factored in by everybody. So next time, we can do something without issuing more shares than we’d be issuable on to this instrument, I think we will be in good shape." |
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Post by kc on Jul 29, 2015 10:48:47 GMT -5
When a blockbuster comes on the market it usually comes with much fanfare. TV ads, radio, newspaper, web, social media. Are we really running the show like it is a blockbuster? No!! How come? Maybe it is not a blockbuster and just a niche product. I've have lost a ton on this stock and I cannot stand the constant singing of Annie. Tomorrow, tomorrow.... No seasoned pharma marketing exec would run a TV ad at this point for Afrezza. The fact that you mention this in your post indicates you have little if any knowledge of the Rx industry. Why the hell would you ever invest in a risky stock in an industry for which you have little knowledge? Blockbusters do not come to the market as doing so implies $1B in sales prior to launch which as you know is not possible. Ramp up after launch to $1B yes but prior to no. Spend some time thinking about all the impediments to market acceptance of Afrezza and draw out a time line and a few bullet points as to how much time, labor and $$ is needed to address these things and then try to figure out how to optimize promotional spending in terms if investment, timing and ROI. For simplicity sake, assume no other identical or near identical product is available for the next 5 years and by doing so, it will make your analysis a bit simpler. Scotta well stated. This take a lot of time. its an Ultra-Marathon.... |
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Post by greg on Jul 29, 2015 10:52:58 GMT -5
Compound26,
The answer to your question is yes. The $4.85 is a rough approximation, based on yesterday's trading and the formula spelled out in the pr.
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Post by compound26 on Jul 29, 2015 10:55:26 GMT -5
Compound26, The answer to your question is yes. The $4.85 is a rough approximation, based on yesterday's trading and the formula spelled out in the pr. Great. Thanks! greg. |
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Post by dstevenson on Jul 29, 2015 10:57:32 GMT -5
This is setting up for a buy in/ news to drive shares up to equal roughly 9 mil shares
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Post by kc on Jul 29, 2015 11:17:21 GMT -5
Reading Adam's comments in my view means that he know and Jay Olsen knows that something is coming down the highway. Why has Jay been silent since the GS conference? My guess is that GS was involved with this deal and couldn't comment about it until it was announced. You can almost bet that within a couple of days/weeks we will hear from GS. Adam F and his lackeys know how the sausage is made so he can plant stories like the one he did today on the refinancing. Read his words carefully below.
The stock-for-debt exchange, which covers a bit more than half of MannKind's obligation, is the worst part of the agreements announced Wednesday because the exchange price of the stock is determined by the price of Mannkind shares over the next 10 trading days.
This is the classic definition of a death-spiral convert, a form of distressed financing which forces companies to hand over more shares when the stock price falls.
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Post by tbone on Jul 29, 2015 11:19:15 GMT -5
Compound26, The answer to your question is yes. The $4.85 is a rough approximation, based on yesterday's trading and the formula spelled out in the pr. You may need a new calculator. 4.85 is 94.5% of 5.13. MNKD didn't even get close to trading there yesterday, let alone that being the VWAP. |
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Post by tbone on Jul 29, 2015 11:20:23 GMT -5
Does Sanofi report tomorrow? This Thursday?
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Post by bretzyboy on Jul 29, 2015 11:22:05 GMT -5
Figured this news would light the fires on both sides of the fence.
As for the side I'm on, I'm glad the debt issue is settled, Matt P. did not mislead in anyway. It's still about the product and the market it will reach. This day will mean very little if at all six months after the relabeling.
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Post by dstevenson on Jul 29, 2015 11:33:04 GMT -5
Reading Adam's comments in my view means that he know and Jay Olsen knows that something is coming down the highway. Why has Jay been silent since the GS conference? My guess is that GS was involved with this deal and couldn't comment about it until it was announced. You can almost bet that within a couple of days/weeks we will hear from GS. Adam F and his lackeys know how the sausage is made so he can plant stories like the one he did today on the refinancing. Read his words carefully below.
The stock-for-debt exchange, which covers a bit more than half of MannKind's obligation, is the worst part of the agreements announced Wednesday because the exchange price of the stock is determined by the price of Mannkind shares over the next 10 trading days.
This is the classic definition of a death-spiral convert, a form of distressed financing which forces companies to hand over more shares when the stock price falls.
Can you elaborate what you mean that they are part of the deal, etc? |
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Post by nylefty on Jul 29, 2015 11:43:33 GMT -5
I just bought more. Have a great day! I bought more too. Today's drop was unjustified, but I'm always happy to buy at a bargain price. |
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Post by kc on Jul 29, 2015 11:47:25 GMT -5
We really don't have the details other than what was stated on this release. When Matt was making the rounds in June one of the purposes was to sell the deal on resolving the convertibles. Jay Olsen was there. You can bet that GS and whoever have had a lot of cocktails at the Hamptons with him this summer planning how to play this out. Why does AF make his comments today? Does he know how it plays out? Timing is everything. Sanofi Call in the AM. Why did MannKind release ahead of the call? Ahead of even MannKind's quarterly call. Perhaps I am speculating too much about nothing. But if you read and re-read Adam's words there seems to be a hidden meaning to them. I stated above that timing is everything or perhaps nothing.
(has anybody heard anything from Jay Olsen? one would have expected a remark since he has been very prolific over the years with his call on MannKind? Upgrade, Downgrades and double-downgrades like he did in February. Al we heard this time was SILENCE? why?).
In privately negotiated exchange agreements with select holders of $84.6M of its existing 5.75% Senior Convertible Notes due 2015, MannKind (MNKD -5.4%) agrees to issue an aggregate of $27.7M in new 5.75% Senior Subordinated Convertible Notes due 2018 and issue common stock for up to $56.9M aggregate principal amount of the 2015 notes. The number of shares will be determined on the basis of future market prices.
Can you elaborate what you mean that they are part of the deal, etc? |
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Post by greg on Jul 29, 2015 11:54:15 GMT -5
Compound26, The answer to your question is yes. The $4.85 is a rough approximation, based on yesterday's trading and the formula spelled out in the pr. You may need a new calculator. 4.85 is 94.5% of 5.13. MNKD didn't even get close to trading there yesterday, let alone that being the VWAP. I did say it's a rough approximation. $4.75, $4.85, $4.95, is 10 cents, 20 cents, or whatever worth quibbling about? |
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Post by mrv on Jul 29, 2015 12:10:31 GMT -5
baba, I also don't like what Matt said. Technically speaking, he did not say that there was absolutely no dilution whatsoever, though he kind of incinuated that there will not be dilution. I do not like that sneaky way, and in hindsight he knew what he was talking about, because these type of deals do not happen overnight. His credibility is questionable. Could he be "trading" MNKD?
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