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Post by surplusvalue on Aug 21, 2016 14:16:40 GMT -5
We all agree that sales need to pick up and really fast (no marathon, this is a 100mt race guys). Scenario is: R/S and then diluition. just my opinion. Unfortunately like someone of you said, they didn't think about an umbrella when price Was higher and we will be punished with more diluition and a reverse split. op Perhaps someone with greater knowledge can comment but from I what recall, a reverse split results in temporary SP gain and is a signal that the end is near. Hate to repeat myself but earlier in the thread I addressed the question of an RS directly " As for a reverse split in this situation it's a kiss of death. Every time a company in this kind of situation does one everyone can see it is an act of desperation and the consequences are negative. For those who want to say that in a split the ratio and value for the shareholders is the same don't bother since the argument doesn't wash: it is much more difficult to go from $5 to $25 than it is from $1 to $5. This is because after the split everyone knows the value has been artificially propped up. An RS from a position of strength and growth is the only time I have seen it work and MNKD is nowhere near these conditions."
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Post by sportsrancho on Aug 21, 2016 15:25:47 GMT -5
I don't think it's the kiss of death. The difference is only psychological. Splits tend to affect unsophisticated investors. They see the stock as cheaper. And tend to buy more. RS tend to sell off. I was in AIG and Beazer Homes when they RS. City lost half it's value after it's RS. But I knew it was fundamental the same. So I bought some at 25 and road it back to 50. I was in BZH when it RS so I sold it. Not because I thought they wouldn't make it, but because I knew it would sell off for no reason. And time is money. So I don't think it's a good idea. I don't believe they have mentioned it? I hope it doesn't happen. But if we are doing ok and they do it. I think it will sell off but come right back up.
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Post by surplusvalue on Aug 21, 2016 16:58:37 GMT -5
I don't think it's the kiss of death. The difference is only psychological. Splits tend to affect unsophisticated investors. They see the stock as cheaper. And tend to buy more. RS tend to sell off. I was in AIG and Beazer Homes when they RS. City lost half it's value after it's RS. But I knew it was fundamental the same. So I bought some at 25 and road it back to 50. I was in BZH when it RS so I sold it. Not because I thought they wouldn't make it, but because I knew it would sell off for no reason. And time is money. So I don't think it's a good idea. I don't believe they have mentioned it? I hope it doesn't happen. But if we are doing ok and they do it. I think it will sell off but come right back up. Didn't say it was the kiss of death in general but rather under the right specific circumstances would work and clearly stated that MNKD isn't in those circumstances at the moment. My experience with specific stocks that have RS'd to obtain funds artificially by raising the stock price without a position of strength or growth/catalysts to maintain the SP not only see a sell off but also see a sp that gets reduced back to the SP level before the RS. Recovery and an increase of fundamental stock value is much more difficult then for the reason I posted. If an RS was such positive thing you wouldnt see a sell off (by both veteran and newbie investors) once it is announced (which is normally what happens) and wouldn't be regarded as an act of desperation which in most cases is exactly what it is. People here wouldnt even be mentioning a RS if MNKD wasn't in such a poor financial position with a SP blockaded in at $1.
And for those investors who are already substantially under water when a company decides to do an RS it is decidedly worse; since they are less able to bail before the RS takes place and then have to wait endlessly for the stock to get back to the level where they can even break even (which often never happens).
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Post by sportsrancho on Aug 21, 2016 17:15:08 GMT -5
I don't think it's the kiss of death. The difference is only psychological. Splits tend to affect unsophisticated investors. They see the stock as cheaper. And tend to buy more. RS tend to sell off. I was in AIG and Beazer Homes when they RS. City lost half it's value after it's RS. But I knew it was fundamental the same. So I bought some at 25 and road it back to 50. I was in BZH when it RS so I sold it. Not because I thought they wouldn't make it, but because I knew it would sell off for no reason. And time is money. So I don't think it's a good idea. I don't believe they have mentioned it? I hope it doesn't happen. But if we are doing ok and they do it. I think it will sell off but come right back up. Didn't say it was the kiss of death in general but rather under the right specific circumstances would work and clearly stated that MNKD isn't in those circumstances at the moment. My experience with specific stocks that have RS'd to obtain funds artificially by raising the stock price without a position of strength or growth/catalysts to maintain the SP not only see a sell off but also see a sp that gets reduced back to the SP level before the RS. Recovery and an increase of fundamental stock value is much more difficult then for the reason I posted. If an RS was such positive thing you wouldnt see a sell off (by both veteran and newbie investors) once it is announced (which is normally what happens) and wouldn't be regarded as an act of desperation which in most cases is exactly what it is. People here wouldnt even be mentioning an RS if MNKD wasn't in such a poor financial position with a SP blockaded in at $1. And for those investors who are already substantially under water when a company decides to do an RS it is decidedly worse; since they are less able to bail before the RS takes place and then have to wait endlessly for the stock to get back to the level where they can even break even (which often never happens). I understand and agree it is not a positive thing!
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Post by chuck on Aug 21, 2016 20:34:15 GMT -5
A reverse split generally follows a long period (years) of shareholder value destruction, despite the best efforts of company management. In short, these are companies that have broken business models, many of which are unfixable. Within this context it is not surprising and it should be expected that the stock price continues to decline post split. More specifically, if the company hasn't solved the problems impacting the company in the many years leading up to the reverse split it is unlikely to do so after the split. In fact, if you bring up a stock price chart of a company with a reverse split, in many cases the chart pre split looks no different than post split. Both are top left to bottom right. In short, a reverse split is not a cause of the problems affecting the company nor does it make it worse but rather it is consequence of the problems and does nothing to solve them.
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Post by mannmade on Aug 21, 2016 22:36:31 GMT -5
I have not tracked it lately but I believe INO did a RS earlier this year. Could be one to research as they are a similarly situated in bio tech.
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Post by surplusvalue on Aug 21, 2016 23:30:24 GMT -5
I have not tracked it lately but I believe INO did a RS earlier this year. Could be one to research as they are a similarly situated in bio tech. You're kidding arent you? Don't need to research anything because INO fits the pattern I mentioned. And I believe you are referring to 2014 and they are right back below from where they started (from $9.85 to $8.57 on Friday) after almost 2 years. How about ONCS or ZGNX or AMBS? All did reverse splits and where are they now compared to just before they split? Yes, they too confirm what I have been saying. And if you do not believe me just ask any of the shareholders who were under water or heavily invested when they split. Or ask any of the shareholders who held and bought more how long their investment has been dead money if not already flushed. I'll repeat it again. A RS given MNKD's present conditions would be an act of desperation and will not fool anyone. At this point MNKD needs to grow, as they say organically. More dilution is in the cards (warrants or otherwise)and a successful increase in scripts is what is needed.
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Post by mannmade on Aug 21, 2016 23:56:51 GMT -5
I was not saying it was a positive thing for INO. I know it is stuck in same place. That was my point. In fact I think it is down a bit and yes believe the RS was actually May 2014, my bad.
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Post by rockstarrick on Aug 22, 2016 0:05:34 GMT -5
I have not tracked it lately but I believe INO did a RS earlier this year. Could be one to research as they are a similarly situated in bio tech. You're kidding arent you? Don't need to research anything because INO fits the pattern I mentioned. And I believe you are referring to 2014 and they are right back to where they started give or take 88 cents after almost 2 years. How about ONCS or ZGNX or AMBS? All did reverse splits and where are they now compared to just before they split? Yes, they too confirm what I have been saying. And if you do not believe me just ask any of the shareholders who were under water or heavily invested when they split. Or ask any of the shareholders who held and bought more how long their investment has been dead money if not already flushed. I'll repeat it again. A RS given MNKD's present conditions would be an act of desperation and will not fool anyone. At this point MNKD needs to grow, as they say organically. More dilution is in the cards (warrants or otherwise)and a successful increase in scripts is what is needed. I agree, a reverse split should be a "last resort" tactic to avoid bk at this point. I'm not familiar with the other examples named, or if they have an FDA approved drug and drug delivery device that could finally take off and give some sustainable value after a split, but if Mnkd is in negotiations with anybody about anything, a reverse split would completely destroy any bargaining strength they may have. I would hope it doesn't come to that. I believe people are just starting to get the Afrezza buzz, Big Mike and crew have a great product to sell to a huge market. It's nice to see endos questioning patients how they are consistantly achieving these amazing A1c's, cutting appointments back from 4/year to 2/year because of nearly total control, and also asking for training on this new inhaled insulin. As Derek put it, one day soon our script numbers need to gap up BIGTIME, that's the day I'm waiting for, and yes, I do believe it will come. The sooner the better, right.
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Post by babaoriley on Aug 22, 2016 0:49:37 GMT -5
About the only time a R/S can be viewed as a positive, is when a growing company does it in order to uplist to an exchange that's viewed as "better." Example - from the Canadian Venture exchange to the NASDAQ.
Most of the rest of the time, it's an act of desperation in order to keep an otherwise failing company on a "better" exchange - example, NAS instead of pink sheets. Rising script counts will keep us over a buck, if they don't rise over a relatively short period of time, no amount of financial finagling will save us, the last hope at that point being a buyout at a price none of us longs will like.
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Post by matt on Aug 22, 2016 9:33:35 GMT -5
Splits and their price effect on stocks has been studied to death and the universal conclusion is that splits make no fundamental changes in the corporation, but that such events convey new information to the financial markets and the information effects drive the observed price behavior in almost all of the cases.
Simply put, when a growing company splits its stock it is signaling the market that they anticipate further growth and that by splitting to a lower PPS then the company can continue to be owned by a broader group of shareholders. The anticipated, but unstated, growth results in a price pop. Conversely, when a stock reverse splits management is indirectly saying that there is not enough organic growth available to achieve the desired PPS. The information effect is a sharp knife and it cuts both ways.
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Post by surplusvalue on Aug 22, 2016 9:50:21 GMT -5
About the only time a R/S can be viewed as a positive, is when a growing company does it in order to uplist to an exchange that's viewed as "better." Example - from the Canadian Venture exchange to the NASDAQ. Most of the rest of the time, it's an act of desperation in order to keep an otherwise failing company on a "better" exchange - example, NAS instead of pink sheets. Rising script counts will keep us over a buck, if they don't rise over a relatively short period of time, no amount of financial finagling will save us, the last hope at that point being a buyout at a price none of us longs will like. In MNKD's case I think we are referring to using a RS to artificially raise the sp to be able to attract investors to raise funds (nothing to do with the exchange).This is what my comments on this topic are directed towards.
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Post by audiomr on Aug 22, 2016 12:04:14 GMT -5
About the only time a R/S can be viewed as a positive, is when a growing company does it in order to uplist to an exchange that's viewed as "better." Example - from the Canadian Venture exchange to the NASDAQ. Most of the rest of the time, it's an act of desperation in order to keep an otherwise failing company on a "better" exchange - example, NAS instead of pink sheets. Rising script counts will keep us over a buck, if they don't rise over a relatively short period of time, no amount of financial finagling will save us, the last hope at that point being a buyout at a price none of us longs will like. In MNKD's case I think we are referring to using a RS to artificially raise the sp to be able to attract investors to raise funds (nothing to do with the exchange).This is what my comments on this topic are directed towards. Don't see how that would work, at least beneficially. Let's take a simplified scenario: Share price is $1, and MNKD does a 2:1 reverse split that raises the share price to $2 (and we'll assume that increase sticks). It also halves the numbers of shares outstanding, however. So to raise any given amount of money through a stock issue, the proportional dilution remains the same. The only reason for Mannkind to do a reverse split would be to stave off de-listing. That prospect is so far off in the future, though, that if it were to come to pass it would mean that Afrezza had failed and the company was doomed anyway. Forget about it.
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Post by flatrock on Aug 22, 2016 12:21:10 GMT -5
In MNKD's case I think we are referring to using a RS to artificially raise the sp to be able to attract investors to raise funds (nothing to do with the exchange).This is what my comments on this topic are directed towards. Don't see how that would work, at least beneficially. Let's take a simplified scenario: Share price is $1, and MNKD does a 2:1 reverse split that raises the share price to $2 (and we'll assume that increase sticks). It also halves the numbers of shares outstanding, however. So to raise any given amount of money through a stock issue, the proportional dilution remains the same. The only reason for Mannkind to do a reverse split would be to stave off de-listing. That prospect is so far off in the future, though, that if it were to come to pass it would mean that Afrezza had failed and the company was doomed anyway. Forget about it. Aren't some institutions restricted from buying shares trading below $5? Getting back above that might make a reverse split worthwhile.
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Post by cathode on Aug 22, 2016 12:54:33 GMT -5
My understanding is that reverse splits can be strategically applied to boost the stock price if they are concurrent with very positive news. This isn't always an attempt to cause a short squeeze, but it can be an outcome. MNKD has too many shares outstanding for their own good. We have seen the manipulation that can occur when market makers can control share price by shuffling around 5 dollar bills (or dollar bills now-a-days). Such a small portion of the float can be passed around between a few players to direct the share price in the way they want. With a greater atomic unit price the fundamental cost and risk of these manipulative tactics goes up. A 10:1 reverse split initiated with very good news such as entering favorable foreign distribution/partnership could have a compounding effect that is greater than just the announcement of a partnership. It can starve the unhedged shorts, for which I think the management still has a (very legitimate) grudge. If the news is solid and positive, the reverse split shouldn't have any lasting negative effect.
Any foreign progress or big news is likely a ways off, so I would expect any reverse split to be as well.
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