Short Interest 01/31/2014

[nemzter]

57M, just a little bit of news please, I can't wait to watch the squeeze, logging in every day in anticipation of one!

www.nasdaq.com/symbol/mnkd/short-interest

Settlement Date Short Interest Avg Daily Share Volume Days To Cover

1/31/2014 57,387,598 6,549,011 8.762788

[spiro]

Incredible, 10 million more shares shorted during the month of January. There is going to be a bloodbath for somebody. I will keep my bets on Al Mann.  I think the shorts lose a lot more often than Al does. 

[alcc]

Spiro, let's not mention the moronic, malicious shorts in the same breath with a man who has already achieved so much but is still going full tilt to bring about a paradigm shift in the treatment of the scourge that is diabetes -- at an age when most would be content to rest on their laurels and putter around in a golf cart.

[spiro]

A1cc,  I putter around in a golf cart a lot, but I don't have many laurels to brag about, except for my wonderful wife, 2 great kids and a lot of good friends. Truthfully, that's good enough for me. But if things go right with MNKD, my wife will think I'm a genius. if things go wrong, we will just move on and probably never invest in a biotech again. But you know, betting on Al Mann looks like a pretty good strategy to me. 

Spiro

[mnkdfan]

Thank you for the update Nemzter. I have tried to put on the shorts mentality to see why they too would risk so much money in thinking MNKD will fail. It seems, for me, the risk for MNKD to fail or having another FDA rejection is extremely low with all that we know today. I have to think that the people betting against MNKD are also logical and intelligent enough to see all the information that us long also seen. Why the views are so polarized is difficult for me to comprehend. Makes me wonder how two people can look at the same data and walk away with two completely different conclusions. Like many of you, my money and confidence is with Al. If I go down, then I go down with good people .

Also, hard for me to believe that an investment firm like Deerfield would drop $160M investment in MNKD without having a team of experts reviewing Afrezza test data. Having an independent firm come in and provide the financial support at this stage of the game was a huge vote of confidence in my opinion. I am sure Deerfield DD team was allowed much more confidential information than your everyday investor.

Have a good night everyone...and BTW Chris, I am with you in terms of MNKD being a rare investment opportunity and that is why I too have taken on a large investment position.

[nemzter]

At least we're all in this together. Glad to know I won't be alone when looking over the bridge to jump LOL

GLTA!

[ezrasfund]

The very large short interest seems worrying, but I have to believe there is more to it than meets the eye. I don't think that these are investors making a very risky bet, but more likely savvy traders hedging with options and making a bet for a big pay day.

Options are a complex subject and I'm not anything close to an expert, but, as I understand it, option straddles are strategies that involve buying puts and calls so that small price fluctuations result in a loss, but big moves in either direction result in large gains.

In similar fashion one could sell MNKD short and use the funds to buy calls or warrants that represent a much larger number of shares, thus insuring a profit if the stock moves significantly in either direction. Unlike a true straddle buying calls and puts, the short sale allows the trader to pocket some cash while still controlling a disproportionate number of shares through calls. MNKD seems like the perfect stock for this type of strategy because the relevant date for the call expirations is known (soon after PDUFA), and it is almost certain that the price movement will be huge, in one direction or another. If Afrezza is approved (and a partner announced) the short seller can cover, adding fuel to the fire, and watch her calls soar in value. If another CRL is issued the trader can dump the calls for whatever they can get and cover the short for an overall profit.

In fact the above scenario seems better if Afrezza is approved, and while there are 50+ million shares short, there seem to be very many more potential shares represented by calls and warrants. (Anyone have an count of the number of shares represented by outstanding calls and warrants vs puts?)

[babaoriley]

Ezra, you are right, regarding all the things that can be done with options, and I think it's clear that some of the shorts are hedged as you point out. However, you make another statement, "and it is almost certain that the price movement will be huge, in one direction or another," and I'm not 100% sure about that, part of the reason being that most everyone here expects that. If disapproved, we're going to move big, no doubt, but if approved, not so sure, as it will depend upon what kind of run we have before the decision. I'm hoping to see a decent rise before AdCom, and, assuming good news from them and from the FDA itself, then we likely hold onto that gain, plus or minus some, but the direction probably depending on whether a partner is announced by then. Without a partner, it won't be satisfying for us.

[mnkdfan]

Ezra, thank you for pointing out the options play and I can now see how a short position is used as an investment tool. Perhaps this is one reason for the below posting by YMB person:

"NEW YORK (AVAFIN) -- Trading of MannKind options resulted in establishing a new 90-day call volume record, where 12,127 call contracts exchanged hands between the buyers and the sellers. A total of 9,096 put and 12,127 call contracts was traded raising a 0.75 put/call ratio on shares of MNKD"

It would help to explain why we saw an increase of 10Mil shorted for the past month alone. Al have said in the past that the stock price was manipulated. I wonder if he was referring to this type of activity. I would think the stock price would be much higher if left alone. These traders don't really care if MNKD get the approval or not as long as major volatility is in play.

Baba, I know what you're saying about the upside move potentially being limited due to the current expectation and run before the FDA decision. But say we hit $7.00 on 4/14 and FDA approve Affrezza on the 15th, I would be shocked and very disappointed if we don't break $10.00 (especially with shorts having to cover) and continue to climb up with partnership announcement. Heck, we nearly broke $9.00 in August with positive trial data with an intraday high of $8.70. To your point,though, if we get another CRL, sub $2.00 PPS is very possible.

I am much more at ease now with my nagging question of why so many shares shorted and thinking that the shorts know something that we do not. Lastly, TSLA stock had over 45% outstanding shares shorted going into the it's earning report about May last year. The report was good and a massive short squeeze happened the next day sending the shares up 25%.

www.growthstockwire.com/3405/short-sellers-beware-this-could-happen-to-you

FDA approval + short squeeze, I hope to see $10.00+ PPS.

MNKDFAN

[babaoriley]

MNKDFAN,

If this stock hits $10 up from about $7 the day before approval without a partner, I will promise you I will sell another chunk of my holdings. I can see it dramatically in the first hour or so, then down. Question is, do I buy some back after the drop I would expect if reality plays out as you have scripted? I actually think the real action will be based on AdCom, rather than approval, especially if AdCom is favorable. If Adcom is negative or viewed as neutral, the price will dive and then an FDA approval will spike it nicely, but still only a spike IMO, without a partner in the picture at the time.

Partnership before AdCom changes everything in a very significant way. Gives every one of us a very reasonable chance to fully financially survive an adverse AdCom and/or FDA outcome (there are some of us who may never recover emotionally or mentally - LOL).

For years, MNKD options have been hugely traded, many, many thousands of open positions. There are big time option gamblers associated with this stock. It's been profitable for years, so long as you are not caught holding when bad news is released - the beauty of it has long been that you more or less know when that might hit.