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Post by dreamboatcruise on Jan 22, 2017 17:10:39 GMT -5
I just ran across the announcement of the Rights Offering for Second Sight (EYES), Al's other publicly traded medical company. They too are needing to raise funding and have suffered sharp declines in share price. The rights offering is a method of raising funding from existing shareholders. Curious if anyone follows EYES and knows details of the Rights Offering and whether that might also be done at MNKD? I assume this sort of thing is only done after management gets buy in from institutional shareholders. finance.yahoo.com/news/second-sight-medical-products-inc-132200115.html |
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Post by lakon on Jan 23, 2017 9:44:53 GMT -5
EYES likes what EYES sees. Matt is on the Board [EYES] there. I favor a rights offering to raise capital for MNKD. I feel what's good for the EYES could be good for all MNKD. At least I am blind to how the Board [MNKD] could be against the option. It also might signal that Mann affiliated entities are ready to pony up, or at least that the Board [EYES] is giving the choice to do so. It would be nice to see some action for a change. How many shares do Mann affiliates control of EYES?  |
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Post by kbrion77 on Jan 23, 2017 10:12:24 GMT -5
MNKD down 95% since IPO and EYES down 82% from IPO price. Both technologies are revolutionary but both groups of shareholders have been gutted. I'm not too familiar with EYES as far as company developments so I won't speak to that but with MNKD I will give Matt/Mike another 2-3 months to show significant progress before I really become an advocate to sell off Afrezza for anything. Their turnaround plan could work but as of right now there has been too many "learning as we go" strategies for my liking and obviously just don't have the cash to pivot again.
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Post by Deleted on Jan 23, 2017 10:27:44 GMT -5
MNKD down 95% since IPO and EYES down 82% from IPO price. Did you account for dilution? |
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Post by kbrion77 on Jan 23, 2017 10:33:55 GMT -5
MNKD down 95% since IPO and EYES down 82% from IPO price. Did you account for dilution? Most definitely not good call. |
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Post by silentknight on Jan 23, 2017 11:23:02 GMT -5
They could certainly offer rights to shareholders, but I'm doubtful they'd find it a successful strategy. I don't know much about EYES' story but as far as MNKD, I'm not willing to invest another dime into the company until I start to see some type of return on my initial investment. I've averaged down repeatedly over the last year or so and with few exceptions, all it's done is put me further into the red as the share price keeps falling.
I'd recommend they focus on giving investors something to be confident about before they go with their hand out to anyone for money. So far, a $8-10 million cash burn and miniscule sales of your only approved product doesn't do much to instill investor confidence. They need to execute, plain and simple. Thus far, said execution has been extremely underwhelming.
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Post by matt on Jan 23, 2017 15:56:14 GMT -5
Any company can do a rights offering at any time (in some countries companies are legally required to do so). The problem is that for a public company there are SEC filings required which costs money and takes time. In most cases the efficient thing to do is to issue shares against an S-3 shelf registration which can literally be done overnight.
How the money is raised is merely a legal detail. The pricing of the securities depends more on how well the company is doing. Selling to the existing shareholders is not necessarily cheaper than just going to the market, and having a rights offering where most of the shareholders do not buy into the offer is a guaranteed way to tank the share price.
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Post by dreamboatcruise on Jan 23, 2017 16:06:35 GMT -5
Any company can do a rights offering at any time (in some countries companies are legally required to do so). The problem is that for a public company there are SEC filings required which costs money and takes time. In most cases the efficient thing to do is to issue shares against an S-3 shelf registration which can literally be done overnight. How the money is raised is merely a legal detail. The pricing of the securities depends more on how well the company is doing. Selling to the existing shareholders is not necessarily cheaper than just going to the market, and having a rights offering where most of the shareholders do not buy into the offer is a guaranteed way to tank the share price. Always appreciate your informed opinions. This was brought up by someone here quite some time ago, and I didn't really see what the benefit would be at that time. It just made me curious as to why EYES, in a similar situation to MNKD (and with shared investors and overlapping board), would have selected to do so. I guess we won't know whether it is successful until a couple of weeks from now. |
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Post by matt on Jan 24, 2017 9:01:35 GMT -5
In private companies these are known as pre-emptive rights, and they give each shareholder the right to keep their percentage ownership intact so long as they can meet the call for more capital. It is less obvious when this happens with a public company, but it is essential the same process. In some countries the right itself has value, it is essentially a special form of a warrant, so if a shareholder has a stake in a fast growing stock but doesn't have the money to double down they can sell their warrant in the market. If demand is high for the stock, the warrant can have a lot of value and the shareholder reaps that value instead of the new investors.
As for EYES, I know precisely nothing about the company so I can't comment. It may be that one or more investors wants to keep their percentage intact without dilution, or it could be many other reasons. It will be interesting to watch as these are rare for US companies.
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Post by mnholdem on Jan 24, 2017 9:53:37 GMT -5
I went through one of these rights offerings with a start up mining company in Minnesota. Shareholders were offered the right to purchase one common share (at a significant discount) for every two shares owned. The amount of shares you could buy could be no more than your current percentage of ownership (your shares / shares outstanding) so each shareholder had a cap on the number of discounted shares s/he could buy.
It seemed like a really good deal and I took advantage to the maximum shares allowable under the rights offering. The problem was that immediately after the offering period began, the stock PPS dropped to the same discounted share price within two weeks. In other words, the general public ended up being able to buy stock for the exact same price as the shareholders who had exercised their right to buy what had been discounted shares two weeks prior.
Fortunately the stock price eventually moved north again and I locked in a very nice profit, but I don't think I'll ever take advantage of a rights offering again. |
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Post by mnkdfann on Jan 24, 2017 10:21:34 GMT -5
EYES has completed at least one previous rights offering in the past. The last one was in 2016: investors.secondsight.com/releasedetail.cfm?ReleaseID=973759"SYLMAR, Calif.--(BUSINESS WIRE)-- Second Sight Medical Products, Inc. (NASDAQ:EYES) ("Second Sight" or "the Company"), a developer, manufacturer and marketer of implantable visual prosthetics to provide some useful vision to blind patients, today announced that it has completed its previously announced rights offering to shareholders of record on May 13, 2016. The rights offering was oversubscribed. Second Sight will retain $19.8 million of the subscriptions received, with subscriptions over that amount being returned to investors. Pursuant to the rights offering, Second Sight will issue approximately 6.0 million shares of the Company's common stock at $3.315 per share, which is equal to 85% the closing price per share of $3.90 on the Nasdaq on May 31, 2016. Net proceeds, after deduction of fees and expenses, are expected to be approximately $19.4 million." SP then $3.90 ... today (as I type this), $1.42. |
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Post by lakon on Jan 24, 2017 10:36:20 GMT -5
EYES has completed at least one previous rights offering in the past. The last one was in 2016: investors.secondsight.com/releasedetail.cfm?ReleaseID=973759"SYLMAR, Calif.--(BUSINESS WIRE)-- Second Sight Medical Products, Inc. (NASDAQ:EYES) ("Second Sight" or "the Company"), a developer, manufacturer and marketer of implantable visual prosthetics to provide some useful vision to blind patients, today announced that it has completed its previously announced rights offering to shareholders of record on May 13, 2016. The rights offering was oversubscribed. Second Sight will retain $19.8 million of the subscriptions received, with subscriptions over that amount being returned to investors. Pursuant to the rights offering, Second Sight will issue approximately 6.0 million shares of the Company's common stock at $3.315 per share, which is equal to 85% the closing price per share of $3.90 on the Nasdaq on May 31, 2016. Net proceeds, after deduction of fees and expenses, are expected to be approximately $19.4 million." SP then $3.90 ... today (as I type this), $1.42. The point is to AVOID DILUTION AND RAISE CASH, something that others like to imply is impossible...if there are a few big percentage holders [Mann], they can stay whole and the rest can either pony up or get lost (diluted) -- your choice. I skimmed the EYES deal, and it looked like one could actually gain on the deal. |
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Post by Deleted on Jan 24, 2017 10:39:19 GMT -5
EYES has completed at least one previous rights offering in the past. The last one was in 2016: investors.secondsight.com/releasedetail.cfm?ReleaseID=973759"SYLMAR, Calif.--(BUSINESS WIRE)-- Second Sight Medical Products, Inc. (NASDAQ:EYES) ("Second Sight" or "the Company"), a developer, manufacturer and marketer of implantable visual prosthetics to provide some useful vision to blind patients, today announced that it has completed its previously announced rights offering to shareholders of record on May 13, 2016. The rights offering was oversubscribed. Second Sight will retain $19.8 million of the subscriptions received, with subscriptions over that amount being returned to investors. Pursuant to the rights offering, Second Sight will issue approximately 6.0 million shares of the Company's common stock at $3.315 per share, which is equal to 85% the closing price per share of $3.90 on the Nasdaq on May 31, 2016. Net proceeds, after deduction of fees and expenses, are expected to be approximately $19.4 million." SP then $3.90 ... today (as I type this), $1.42. The point is to AVOID DILUTION AND RAISE CASH, something that others like to imply is impossible... if there are a few big percentage holders [Mann], they can stay whole and the rest can either pony up or get lost (diluted) -- your choice. I skimmed the EYES deal, and it looked like one could actually gain on the deal. in dilution, every one gets hosed. Even Mann foundation percentage owned got reduced. Earlier they were holding 130 million of 420 million shares after dilution, they are holding 130 million of 480 million ( actually 53 0 million - 480 mil shares + 50 mil warrants ) |
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Post by agedhippie on Jan 24, 2017 11:58:29 GMT -5
Earlier they were holding 130 million of 420 million shares after dilution, they are holding 130 million of 480 million ( actually 53 0 million - 480 mil shares + 50 mil warrants )Which brings me to an interesting question: are those warrants registered so they can be traded? The original ones were listed but I am not sure these ones were as well. |
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Post by Deleted on Jan 24, 2017 12:03:09 GMT -5
Earlier they were holding 130 million of 420 million shares after dilution, they are holding 130 million of 480 million ( actually 53 0 million - 480 mil shares + 50 mil warrants )Which brings me to an interesting question: are those warrants registered so they can be traded? The original ones were listed but I am not sure these ones were as well. These warrants are not publicly traded but I am not sure if they can or cannot be transferred/ sold |
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