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Post by rossomalley on Aug 10, 2017 18:25:20 GMT -5
OK - can we please stay on the topic of "Preferred Shares"? I've returned the useful posts (1 page out of 6) to this forum. Please stay on topic. No name calling, personal attacks etc. --- or I will shut it down. Amen! On the issue of preferred shares, these seem potentially quite useful for solving/helping to solve MNKD's most pressing problem but there is much that is unclear (at least to me). For instance, what would the impact be on shareholder value if a substantial amount was sold of the PS's? Obviously we would stand even less chance of any return in event of BK, but if MNKD succeeds, how much would we be 'diluted' by selling 10 million PS? It would be much more than 10%, no?
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Post by agedhippie on Aug 10, 2017 21:05:26 GMT -5
OK - can we please stay on the topic of "Preferred Shares"? I've returned the useful posts (1 page out of 6) to this forum. Please stay on topic. No name calling, personal attacks etc. --- or I will shut it down. Amen! On the issue of preferred shares, these seem potentially quite useful for solving/helping to solve MNKD's most pressing problem but there is much that is unclear (at least to me). For instance, what would the impact be on shareholder value if a substantial amount was sold of the PS's? Obviously we would stand even less chance of any return in event of BK, but if MNKD succeeds, how much would we be 'diluted' by selling 10 million PS? It would be much more than 10%, no? It depends on what you mean by diluted. The rights on those shares are not set at this point (see the risk section in the 10K or 10Q for what this means). Dilution would be set in the terms and we have no idea of those until the stock is issued.
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Post by anderson on Aug 11, 2017 1:05:10 GMT -5
One thing I hope is that if preferred shares can be converted to a number of common shares they are time gated so that short can not use them as an easy way out. Selling perfected shares could be a good way of keeping shorts stuck in their positions and still raising capital.
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Post by thall on Aug 11, 2017 5:46:48 GMT -5
One thing I hope is that if preferred shares can be converted to a number of common shares they are time gated so that short can not use them as an easy way out. Selling perfected shares could be a good way of keeping shorts stuck in their positions and still raising capital. The preferred would likely be issued as a convertible so the new owner could hedge the postion by selling short against the number of common shares the preferred is worth.
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Post by Deleted on Aug 11, 2017 6:38:19 GMT -5
One thing I hope is that if preferred shares can be converted to a number of common shares they are time gated so that short can not use them as an easy way out. Selling perfected shares could be a good way of keeping shorts stuck in their positions and still raising capital. The preferred would likely be issued as a convertible so the new owner could hedge the postion by selling short against the number of common shares the preferred is worth. A conversion feature is an option. Castagna knows it would allow owners to short the common, therefore will most likely not include it with preferred.
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Post by cjm18 on Aug 13, 2017 14:51:25 GMT -5
True or false. Raising money via preferred shares is dilutive but might be on better terms than common stock because preferred shareholders get paid something if there is bankruptcy.
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Post by mnholdem on Aug 13, 2017 17:08:39 GMT -5
True.
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Post by mango on Aug 13, 2017 18:05:51 GMT -5
Yes or No: If you do not believe the company will file bankruptcy, would you advise someone, perhaps yourself, to purchase preferred shares over common?
I'm asking because I don't know stockalese
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Post by agedhippie on Aug 13, 2017 20:05:55 GMT -5
Yes or No: If you do not believe the company will file bankruptcy, would you advise someone, perhaps yourself, to purchase preferred shares over common? I'm asking because I don't know stockalese If you believe the stock will do well then buy common stock and not preferred. The return for prefs is usually pegged to the value of their dividend payment so you lose the capital appreciation you get in common stock.
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Post by cjm18 on Aug 13, 2017 20:14:31 GMT -5
Yes or No: If you do not believe the company will file bankruptcy, would you advise someone, perhaps yourself, to purchase preferred shares over common? I'm asking because I don't know stockalese If you believe the stock will do well then buy common stock and not preferred. The return for prefs is usually pegged to the value of their dividend payment so you lose the capital appreciation you get in common stock. Would the potential buyer of the preferred require a dividend?
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Post by agedhippie on Aug 14, 2017 8:54:29 GMT -5
If you believe the stock will do well then buy common stock and not preferred. The return for prefs is usually pegged to the value of their dividend payment so you lose the capital appreciation you get in common stock. Would the potential buyer of the preferred require a dividend? Typically yes. They are usually bought as a reliable revenue stream rather than for capital growth. That's not to say that Mannkind couldn't do something completely different from normal as prefs can have any terms you want attached, but institutional investors want that reliable revenue stream.
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Post by cjm18 on Aug 14, 2017 9:53:47 GMT -5
Sounds like the next round of cash is coming from these shares. How much is the question. How will common react?
Loan lease back could be exchanged for debt not cash (according to the other thread on here) Nothing in Pipeline close to FDA approved. No partner no cash Brazil is a year away. Afrezza is only approved to sell in USA. Why would uae government give us money before approval.
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Post by Deleted on Aug 15, 2017 8:16:39 GMT -5
Out of curiosity if MannKind were to offer sufficient preferred shares to retail investors that would eliminate the possibility of bankruptcy, what rate of interest would you require to purchase these shares?
For instance, if these shares offered 3%, slightly above 30 year US bonds, I would be willing to tie up my $ for an extended period.
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Post by mnkdfann on Aug 15, 2017 9:31:53 GMT -5
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Post by thall on Aug 15, 2017 9:41:40 GMT -5
Out of curiosity if MannKind were to offer sufficient preferred shares to retail investors that would eliminate the possibility of bankruptcy, what rate of interest would you require to purchase these shares? For instance, if these shares offered 3%, slightly above 30 year US bonds, I would be willing to tie up my $ for an extended period. Given Mannkind's current balance sheet, cash flow, and seniority of Deerfield debt, no interest rate would attract me since I have to doubt MNKD's ability to ever pay any. If I were a large investor I might consider it if the preferred were offered as a convertible with some sort of conversion adjustment if the stock price falls below a certain point -- similar to the convertible coming due next year. In that case, I would still only buy it at a discount to the current market price since I would want to hedge by shorting the underlying shares in order to lock in some profit up front.
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