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Post by silentknight on Apr 12, 2016 7:52:02 GMT -5
I'm not opposed to the idea of increasing the share count, especially if it takes the threat of bankruptcy off the table and allows the company to move forward. I would be inclined to vote "yes", assuming Matt communicates to shareholders the path forward on commercialization of Afrezza and long-term capital strategy. I am not comfortable with the idea of increasing the share count to the tune of a new 150 million shares with the company only saying "Trust Me". I've invested in this company for too long and seen too many mistakes made for that to happen.
A secondary might be the only way we avoid total collapse of the company. I'd rather have that then lose it all because we were too proud or disgruntled to do what was right out of prior frustrations. Matt is doing a good job so far. He has my confidence but I've adapted the old Reagan philosophy of "trust but verify". If we get that, I'll vote yes to every share and buy more if and when there is a secondary.
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Post by longinvstr on Apr 12, 2016 9:59:21 GMT -5
Maintaining a long position in MNKD must come with a healthy dose of stubborn faith & trust. If I didn't trust Matt, I wouldn't still be here. It's not blind, I do want honest appraisals and clear communication of the path forward. I like that Matt is part of the (original) nuclear Mannkind family. I am happy to trade a bit of experience he may lack for the perceived loyalty to the family and resulting determination to see Al's vision to fruition. Yes, I want to know more but I trust that they feel these are the required tools needed for next step success. Ironically, to hobble the management group by disallowing additional shares to be authorized only favors the short position.
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Post by lakon on Apr 13, 2016 10:50:33 GMT -5
The additional shares of common stock that would become available for issuance if the proposal is adopted could also be used by the Company to oppose a hostile takeover attempt or to delay or prevent changes in control or management of the Company. For example, without further stockholder approval, the Board could strategically sell shares of common stock in a private transaction to purchasers who would oppose a takeover or favor the current Board. Although this proposal to increase the authorized common stock has been prompted by business and financial considerations and not by the threat of any hostile takeover attempt (nor is the Board currently aware of any such attempts directed at the Company), stockholders should be aware that approval of the proposal could facilitate future efforts by the Company to deter or prevent changes in control of the Company, including transactions in which the stockholders might otherwise receive a premium for their shares over then current market prices. I wasn't concerned about a hostile take over while Al was alive his percentage over ownership pretty much prevented this. What happened to Al's shares? Seems to me additional available shares also dilutes the percentage of Al's shares and actually increases the chance of hostile takeover? Not if MNKD BoD sells shares or a convertible debt offering to the Al Mann Foundations [AMF]... |
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Post by lakon on Apr 13, 2016 11:15:28 GMT -5
need to remember that they are currently at 450M outstanding shares. If they take this right up to 700m its more like a 65% dilution. OOG I believe MNKD had 550M authorized shares with a proposal to increase by 150M to 700M total authz. Given your 450M outstanding, MNKD already had 100M to play with, but that is probably not enough at current prices to fulfill all requirements for the authz shares, such as raising capital, hostile bid protection, employee incentive packages, m&a deals, partnerships, etc. Frankly, I wish they had pulled the band-aid off quickly with another 450M authz for a total of 1B authz. Then, get another ATM setup for 250M, don't recall the fine print on the regs here. Keep 250M authz for a rainy day as protection against hostile actions whether external, internal, or family [AMF]. It's a fiduciary duty and good board maneuvering to boot... In any order: Then, do a deal with AMF to expand the LOC for $300M. Get Deerfield to pony up another $300M. Get 1 or 2 regional and/or int'l distribution deals done. Relaunch 4th of July! Sell 60M shares ATM at or above $5/sh for $300M. Get those RLS milestones $100M. MNKD would be back to $1B in accessible funds. Do you think the price stays where its at, or do you think a short squeeze is where its at? If a short squeeze takes MNKD up up and away, MNKD could sell into it at substantially higher prices during the unraveling, thus, assuring themselves plenty of runway for the pipeline... In the meantime, MNKD needs to get those shares AUTHZ! |
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Post by BlueCat on Apr 13, 2016 11:40:10 GMT -5
As I've stated before, I don't feel I have enough info to state a strong opinion or vote either way.
But I do have concerns, and here's a couple more:
1. Bear argument/thesis- Dilution or potential for it. Extending the shares possible doesn't guarantee dilution. But it does effectively, increase its potential. And asking for those shares certainly shows an intent to possibly do it - in whatever form that takes (counter hostile, mergers, option grants, etc). More shares are simply more shares once activated or what.
Bears have lauded that low pps in contrast to other biotech startups, even without bad news, has been in part because of the ~450m shares outstanding already and what that translates to in market cap. We've also seen a lot of debate around reverse split to reduce that outstanding, and reduce potential for shorts (or at least, force the naked out into light of day). Whether or not that's a good idea, its certainly been top of mind, or at least, used as an excuse for the shorting.
I am concerned what putting more on the market would do - even at a higher (e.g. 5/share) price.
2. Bear argument - management compensation during lack of stock performance. While one can understand that compensation through stock options is certainly better than cash at moment, and is needed to attract and retain talent, it still doesn't offer good optics. Unless management could explicitly state stock was used instead of cash compensation to reduce quarterly burn.
So - I'm seeing both sides. On the upside- having a cushion in place protects against BK and counters that major bear thesis.
On the other hand- nightmare for retail long investors could look something like an SEC filing showing large option grant to management (in addition/over to cash comp) and another offer like TASE coming out with WS short interest finding way to play games to drop price again. All while we aren't yet seeing that hockey stick in sales or any other deals or milestones from RLS.
Reality check - This nightmare is what we've seen for the past year. Thank goodness they stopped the automatic exercise last Spring. And none of that had to do with SNY. (Well ok, maybe the lack of hockey stick sales numbers- that, yes).
So looking at both sides, but I don't feel confident with this move yet, and I would rather other cushions be found, such as AMF LOC sitting there. Or sale of property or such.
Deerfield - not so much.
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Post by end2war on Apr 13, 2016 12:11:40 GMT -5
I would vote yes if the shares are needed to make a cash raising deal that involved a partnership or license with a big pharma or someone like AMGN. I might vote yes if the reason was to raise cash in a dilution and there were no other choice. However, before I vote yes, I would like to have management explain the reasons behind the lift in authorized shares. I assume that is going to be presented and explained to shareholders. Until then, I would vote no. I am not in favor of a blank check.
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Post by dreamboatcruise on Apr 13, 2016 18:05:20 GMT -5
I would vote yes if the shares are needed to make a cash raising deal that involved a partnership or license with a big pharma or someone like AMGN. I might vote yes if the reason was to raise cash in a dilution and there were no other choice. However, before I vote yes, I would like to have management explain the reasons behind the lift in authorized shares. I assume that is going to be presented and explained to shareholders. Until then, I would vote no. I am not in favor of a blank check. I doubt we'll get a specific use at this point. Though all of the things you list even if partnership or license are dilution. |
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Post by onemann on Apr 13, 2016 19:53:28 GMT -5
I think it'll be explained vaguely if at all. I'd prefer they use the 30 Mil LOC to buy another quarter of funding and I would hope at that point we have received a milestone payment RLS and from our new Afrezza partner. Those payments plus SNY settlement money if any, should have us into 2H 17. At that point we should be seeing sales #s ramped up and other licensing deals for TS kicking in. I vote no! The execs had their time cashing in the tons of shares they get now let's stop diluting the little guys and create value.
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Post by anderson on Apr 13, 2016 20:36:23 GMT -5
Don't think retail will have to worry about their vote having any affect on the increase in authorized common shares. If the board and The Mann Group LLC , Alfred E. Mann Living Trust are for it, then only a few Institutional owners need to agree. As you can see below for Blackrock, Vanguard, State Street, it looks like they will all vote yes. That is 43.8% right there. If all other institutional investors have similar rules, retails vote is meaningless. If you look at www.bradreese.com/blog/blackrock-proxy-vote-guidelines.pdf Increase in authorized common shares: BlackRock considers industry specific norms in our analysis of these proposals, as well as a company’s history with respect to the use of its common shares. Generally, we are predisposed to support a company if the board believes additional common shares are necessary to carry out the firm’s business. The most substantial concern we might have with an increase is the possibility of use of common shares to fund a poison pill plan that is not in the economic interests of shareholders. about.vanguard.com/vanguard-proxy-voting/voting-guidelines/B. Increase in authorized shares The funds are supportive of companies seeking to increase authorized share amounts that do not potentially expose shareholders to excessive dilution. We will generally approve increases of up to 50% of the current share authorization, but will also consider a company's specific circumstances and market practices www.ssga.com/investment-topics/environmental-social-governance/2015/Proxy-Voting-and-Engagement-Guidelines-United-States.pdfIncrease in Authorized Common Shares In general, SSGA supports share increases for general corporate purposes up to 100% of current authorized stock. SSGA supports increases for specific corporate purposes up to 100% of the specific need plus 50% of current authorized common stock for US firms. When applying the thresholds, SSGA will also consider the nature of the specific need, such as mergers and acquisitions and stock splits. |
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