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Post by stevil on Feb 7, 2016 15:51:05 GMT -5
That's unfortunate.
Wise men learn more from fools than fools from the wise.
-- Cato the Elder
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Post by tayl5 on Feb 7, 2016 15:56:44 GMT -5
Of course you can do a reverse split and offering simultaneously. The question is who would want to buy the shares? The main reasons companies do reverse splits is to increase the share price to avoid delisting and get the price above a particular threshold for institutional investors. In most cases, the problems that caused the share price to fall in the first place persist and the shares continue to fall, often at an accelerated rate. Unless it's forced by delisting, a reverse split is an unnecessary distraction and it would be better for management to focus on solving problems to get the share price up.
The possibility of a reverse merger came up in a previous thread. Generally that's a move where a public company with cash and no prospects merges with a private company with no cash and prospects. We don't have cash but we do have prospects. I could imagine a scenario where we merge with a private company with cash to form a well-financed public entity that has a better future than either partner alone, particularly if the private company has enough profits to use the MannKind NOL tax writeoffs. A clever private equity firm could do this deal, perhaps even in conjunction with a secondary offering on the combined entity.
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Post by me on Feb 7, 2016 16:02:29 GMT -5
@reverselo , do you think that more money can be raised if they do a RS and then offer at that higher resulting share price?! No clue I'm asking if it's possible. I have no idea if it's possible My point was that, all else being equal, the resulting proceeds from an offering at the pre-RS price would be identical to the offering at the RS price. There may be other factors that might influence the attractiveness of the offering, but the arithmetic under both scenarios yields the same proceeds. I want to raise 100 million pre-RS, so I offer 100 million shares at current price of one dollar. My proceeds at the offer price and a full subscription = 100 million and my market cap is 500 million. Now, I want to raise the same 100 miliion, but upon completion of a 10-1 RS, so I offer 10 million shares at the current RS price of $10. In this scenario, my proceeds at the offer piece and full subscription = 100 million and my market cap is 500 million...identical to the press scenario. I'm not suggesting there are no other factors influencing the SUCCESS of one scenario over the other, only that the mechanics yield identical results. |
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Post by Deleted on Feb 7, 2016 16:27:54 GMT -5
I totally get it now. Thanks for explanation.
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Post by sluggobear on Feb 7, 2016 16:47:16 GMT -5
I remember looking at this RS question when Lexicon did a 1:7 RS. They were hovering at 1.00 and had dipped below a few times. They came charging back from $7 and while LXRX is way down now along with all biotech, a couple months ago they were above 13.50. Another one I own and am hopefully going to be happy long time. Other than the fricking onerous partnership with Sanofi. RS does not necessarily spell doom but of course circumstances always vary. Here is an article from 2011 that looked at recent historical records (since 2000) for RS: www.cnbc.com/id/42212417Reverse Stock Splits Are Usually Good for Investors: ReportLori Spechler Tuesday, 22 Mar 2011 | 3:07 PM ETCNBC.com "New research indicates that reverse stock splits are usually good for investors. According to a new report by Cleve Rueckert, Birinyi Associates senior equity strategist, there have been 14 stocks in the S&P 500 since 2000 that have undergone a reverse stock split. Of those fourteen stocks, twelve were higher one year after the effective date of the reverse split, two were lower. The average gain was a gigantic 62.55 percent. The best performer: Titanium Metals . Titanium Metals rallied 350% in the year following the effective date of its 1:10 reverse stock split on February 18th, 2003. The worst performer: Tyco . Tyco lost 25% in the year following the effective date of its 1:4 reverse stock split on July 2, 2007. Citigroup announced a 1:10 reverse stock split Monday, effective after the close of trade May 6, 2011." "Here is the full list:
Reverse Stock Splits Company Stock Split Effective Date Pct. Change 1yrLab Corp. of America (LH) 1 for 10 5/4/00 121.49% Raytheon (RTN) 1 for 20 5/15/01 51.64% Titanium Metals (TIE) 1 for 10 2/18/03 350.95% Priceline.com (PCLN) 1 for 6 6/16/03 9.71% Intuitive Surgical (ISRG) 1 for 2 7/1/03 29.78% CBS Corp. (CBS) 1 for 2 1/3/06 20.61% JDS Uniphase (JDSU) 1 for 8 10/17/06 -5.48% Tyco (TYC) 1 for 4 7/2/07 -25.00% Discovery Comm (DISCA) 1 for 2 9/18/08 114.34% Time Warner Cable (TWC) 1 for 3 3/13/09 90.32% Time Warner Inc. (TWX) 1 for 3 3/30/09 84.87% American Intl. Group (AIG) 1 for 20 7/1/09 87.39% E*Trade Financial (ETFC) 1 for 10 6/2/10 2.80% Motorola Solutions (MSI) 1 for 7 1/4/11 4.83% Source: Birinyi Associates " |
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Post by peppy on Feb 7, 2016 16:57:59 GMT -5
I'm not trying to infuse negativity into the board, just reality. Matt said that "at this time" BK was not an option and would be a last resort- he never said MNKD wasn't going BK. While it's very possible that the debt will be restructured and operating expenses reduced (my guess is there will be more layoffs... since that's the easiest thing to control. Still don't understand the Hakan severance/retirement package, but that's another issue for another day) There absolutely is justification for the ongoing speculation. Money doesn't grow on trees and won't fall from the sky. While I agree with you that it may be mental masturbation to keep dwelling on the "how" we'll stay alive or "what" will eventually become of us, it very much is a topic that can and should be discussed. But it is all speculation at this point because Matt did not outline his plan for how he would get us to the lands of profitability. We're casting our sails to the winds of the diabetes clinics and the milestones from our recent deal as well as the hopes of making more TS deals. But it's a very real issue that as of now, we do not have enough money to successfully run this company past 6 months. For the record: I don't want BK or a sale. I would love for Al to step up and keep funding this. But there are so many extra variables that go into all of this- As Al has admitted to not knowing beforehand. So it's not a foregone conclusion that he will keep stepping up, or that it will lead us to success even if he does. So my arguments are more negative than my hopes because I don't think it's as likely as other people on here who keep saying Al will keep writing blank checks. No one has heard from him in months and no one really even knows how much he has left in his piggy bank even if he did want to keep funding us. You know me well enough to know, I can not help it. The Citadel Is Breached: Congress Taps the Fed for Infrastructure Funding ellenbrown.com/2016/01/16/the-citadel-is-breached-congress-taps-the-fed-for-infrastructure-funding/ The highway measure would be financed in part by a one-time use of Federal Reserve surplus funds and by a reduction in the 6 percent dividend that national banks receive from the Fed. . . . Banks with $10 billion or less in assets would be exempt from the cut.
The Fed’s surplus capital comes from the 12 reserve banks. The highway bill would allow for a one-time draw of $19 billion from the surplus, which totaled $29.3 billion as of Nov. 25. . . .
Banks vigorously fought the dividend cut, which was estimated to generate about $17 billion over 10 years for the highway trust fund.
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Post by jpg on Feb 7, 2016 17:15:04 GMT -5
Come on guys! This thread is all just an exercise in mental masturbation. Matt could not have been more clear. MNKD is not going BK! His statement was definitive. Of course he cannot say what will or will not happen a year from now - nobody can. Debt is currently being re-negotiated. Overhead (cash burn) is being appropriately adjusted. There is simply no justification for this ongoing speculation. Let's try to be reasonable and a little more positive, please. I know very few CEOs who state BK is their end game. Saying BK is definitively off the table is part of a CEOs job description. Saying it with conviction is makes it even more important when you are the CEO of a cash poor biotech who just got dumped and has no obvious options. How often do you hear the CEO of Coke, FedEx etc. even mention BK? Don't pretend MNKD is a fortune 500... BK is the baseline assumption and most likely scenario and speculation. They have max 2-3 months left to find a 'long term' (over 1 year of funding) solution (and hopefully some semi credible funding option...). After that, unless there is a big increase unscript count, it's a death spiral with below 3 months of operating cash. The only credible way that could happen that I can see is a big endorsement by the ADA or another big highly respected group that would happen before (and at) the ADA meeting. It hasn't happened yet. I doubt it will. |
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Post by jpg on Feb 7, 2016 17:17:28 GMT -5
Double posting deleted
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Post by suebeeee1 on Feb 7, 2016 21:06:36 GMT -5
@reverselo , do you think that more money can be raised if they do a RS and then offer at that higher resulting share price?! No clue I'm asking if it's possible. I have no idea if it's possible Whether you do a reverse split and then conduct a secondary offering or you just do a secondary offering, it all results in the same amount earned: MNKD currently has 409M shares outstanding Lets say they do a stock offering right now at the sp of $1. They offer 409M at .50/share and raise 205M All of our shares are also now only worth $.50/share Lets say they do a RS 10 for 1. SP is now worth $10 and there is 40.9M shares outstanding. They do a stock offering for another 40.9M and raise $5/share for 205M and all of our shares which we turned in 10 for 1 are now worth only $5/share. |
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Post by stevil on Feb 7, 2016 22:46:00 GMT -5
True, but I'd like to add that it'd put a huge bullseye on our back. It'd make the outstanding share number much lower, and thus easier to drive back down with less risk to the upside if things ever turn around (due to having to return fewer shares if they get called in). I really think it would be catastrophic to do so when the short interest on this stock is so high.
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Post by biffn on Feb 8, 2016 0:22:51 GMT -5
I frankly don't care about your worst case analysis. this is essentially a binary propostion. It is either some number approaching zero or some multiple of current value ranging conservatively from 5x to 50x. I think the odds are better than 50/50 on the long side and so I like the bet. It appears that most other longs feel similarly. I'm guessing the RLS benchmark payment from the proof of concept will be forthcoming and you can stop your doom and gloom for at least another year.
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Post by cretin11 on Feb 8, 2016 0:48:48 GMT -5
True, but I'd like to add that it'd put a huge bullseye on our back. It'd make the outstanding share number much lower, and thus easier to drive back down with less risk to the upside if things ever turn around (due to having to return fewer shares if they get called in). I really think it would be catastrophic to do so when the short interest on this stock is so high. This post makes no sense. |
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Post by BlueCat on Feb 8, 2016 1:43:28 GMT -5
True, but I'd like to add that it'd put a huge bullseye on our back. It'd make the outstanding share number much lower, and thus easier to drive back down with less risk to the upside if things ever turn around (due to having to return fewer shares if they get called in). I really think it would be catastrophic to do so when the short interest on this stock is so high. Or also disaster strikes when the shorts say "o goodie. Now we get to short 10 back down to 1 all over again! Thank you!" |
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Post by benyiju on Feb 8, 2016 3:10:57 GMT -5
I frankly don't care about your worst case analysis. this is essentially a binary propostion. It is either some number approaching zero or some multiple of current value ranging conservatively from 5x to 50x. I think the odds are better than 50/50 on the long side and so I like the bet. It appears that most other longs feel similarly. I'm guessing the RLS benchmark payment from the proof of concept will be forthcoming and you can stop your doom and gloom for at least another year. You seriously think the first RLS milestone payment will come soon enough and in a large enough amount to solve MNKD's cash crisis for a year? Wow. That's magical thinking, my friend, I love it! (Still haven't sobered up from your Super Bowl party? Never mind! If you're a Denver fan, enjoy it!) |
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Post by sf1981 on Feb 8, 2016 3:19:26 GMT -5
No clue I'm asking if it's possible. I have no idea if it's possible My point was that, all else being equal, the resulting proceeds from an offering at the pre-RS price would be identical to the offering at the RS price. There may be other factors that might influence the attractiveness of the offering, but the arithmetic under both scenarios yields the same proceeds. I want to raise 100 million pre-RS, so I offer 100 million shares at current price of one dollar. My proceeds at the offer price and a full subscription = 100 million and my market cap is 500 million. Now, I want to raise the same 100 miliion, but upon completion of a 10-1 RS, so I offer 10 million shares at the current RS price of $10. In this scenario, my proceeds at the offer piece and full subscription = 100 million and my market cap is 500 million...identical to the press scenario. I'm not suggesting there are no other factors influencing the SUCCESS of one scenario over the other, only that the mechanics yield identical results. I doubt MNKD woul be able to even raise USD 50m in the markets right now without shares totally collapsing. It is total delusion to dream about doubling the share count. There aren't enough buyers to make that feasible. Question: why would they have needed the TASE charade, if they could have just simply done a major rights issue back then, before the SNY drop-out? Remember: from the point of view of institutions, MNKD stock is way less "investable" now than it was back in November, when SNY was still in. The only hope, IMO, is Deerfield converting debt to equity, Al Mann upping the credit line, MNKD renewing the ATM and SNY offering a cash settlement (though I think it is way more likely they will just waive the LOC debt than to pony up more cash, which doesn't help MNKD so much in rg to cash burn). If some or all of these things happened, bankruptcy in 2016 can be avoided. Still, even then, there is no real concept to turn the company around, but I think in that scenario, shares could rise to USD 1.50-2.00 or so, if immediate survival is no longer in question. |
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