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Post by myocat on Jan 27, 2017 13:15:11 GMT -5
Has anyone seen the proxy for R/S split?
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Post by wildthing on Jan 27, 2017 20:44:28 GMT -5
Based on past experience, the first thing to appear will be announcement of a "special stockholder meeting" usually within 2-3 weeks to discuss "proposals is an important element of [company's] plan to maintain listing." The 14A usually comes a little before or after the announcement and may include several financing items like desire to issue a new class of convertible or bond, etc. The reverse split is usually near the end of the list saying something along the lines,
"To approve an amendment to our Fourth Amended and Restated Certificate of Incorporation, as amended, to effect a reverse split of our outstanding common stock at a ratio in the range of 1-for-[x] to 1-for-[y], to be determined at the discretion of our Board of Directors, whereby each outstanding ["x" to "y" number of] shares would be combined, converted and changed into 1 share of our common stock, without reducing the number of authorized shares of our common stock."
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Post by falconquest on Jan 27, 2017 21:11:24 GMT -5
.....and then once announced the share price tanks!
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Post by brotherm1 on Jan 27, 2017 22:56:25 GMT -5
How much does it tank once it is announced falconquesf? Can you cite some examples of stocks that tanked right after the announcement and how much they tanked?
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Post by falconquest on Jan 28, 2017 5:58:15 GMT -5
From Zacks:
"Charles Kaplan, president of the investment consulting firm Equity Analytics, told Bankrate.com, "It is usually a very negative sign when a company reverse splits their stocks." But how the market reacts often depends on what else the company is doing to reverse its fortunes. If it simply declares the reverse split and goes on with business as usual, investors may see the split as nothing more than a smoke screen, and the price may go right back to falling as they sell their shares. But if the split is accompanied by serious changes in management, structure or strategy, investors may give the company more time to right the ship".
With the operative word being "may".
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Post by yash on Jan 28, 2017 6:25:12 GMT -5
If they have good news then why R/S?
If the SP does not go above $1 then let the MNKD be de-listed and focus on sales or partnerships.
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Post by uvula on Jan 28, 2017 8:54:24 GMT -5
The original post is misleading.
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Post by matt on Jan 28, 2017 8:56:02 GMT -5
If they have good news then why R/S? If the SP does not go above $1 then let the MNKD be de-listed and focus on sales or partnerships. For the simple reason that the company still needs money to operate as sales are a very long way from breakeven. Raising money on a national exchange is easier (read cheaper) and less dilutive than when done on the OTC.
It is easy to say that the company should focus on sales, but if the cash runs out they will be unable to maintain the sales force. Likewise it is easy to talk about partnerships, but much more difficult to actually land one especially after a major pharma was already a partner and chose to walk away. Shareholders might complain that Sanofi was not a good partner, not sufficiently focused on Afrezza, or that they did not "try hard enough", but that doesn't remove the taint. Don't expect that another big pharma is going to come knocking on the door, and second or third tier players are not what this product needs.
Which leaves the R/S. Painful, no doubt, but the other feasible alternatives are more painful. There are no guarantees of success, but this is the best option management has available at the moment.
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Post by sportsrancho on Jan 28, 2017 9:25:24 GMT -5
How much does it tank once it is announced falconquesf? Can you cite some examples of stocks that tanked right after the announcement and how much they tanked? C split in 2011. It was at $5 and lost half it's share price going from $50 to $25 with in 2 or 3 months I believe. I bought it then, and with in a few months it was back to $50. I was in BZH when it split and it has never recovered. I jumped out of BZH right after they announced it. It lost half it's share price and has still not recovered. I think it's a case by case thing. Just like when dilution is announced people sell. And then jump back in. It's perception IMO usatoday30.usatoday.com/money/perfi/columnist/krantz/2011-05-12-citigroup-reverse-stock-split_n.htm |
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Post by wildthing on Jan 28, 2017 9:43:19 GMT -5
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Post by mnholdem on Jan 28, 2017 11:33:25 GMT -5
However, there are examples of significant returns from companies who managed to turn things around:
Stock (exch:ticker)
Date of Reverse Split
Return (Since Reverse Split)
Palm (NASDAQ:PALM)
Oct. 15, 2002 (1-for-20)
633%
priceline.com (NASDAQ:PCLN)
June 16, 2003 (1-for-6)
347%
Laboratory Corporation of America (NYSE:LH)
May 4, 2000 (1-for-10)
330%
Corrections Corporation of America
May 18, 2001 (1-for-10)
483%
Brightpoint
June 27, 2002 (1-for-7)
1,788%
Source: Yahoo! Finance (2009)
---
The author who provided these examples also wrote:
Focus on fundamentals
... For a company's stock to trade low enough that it'll even consider a reverse split, it typically has to endure a terrible period of financial results. The split itself doesn't solve the operational problems a company faces, so companies that can't find a way to recover simply fail. The few that do find permanent solutions to their problems may have spectacular runs, but from an overall return perspective, they simply can't outweigh the vast majority of firms that fail.
Stocks that choose to undertake reverse splits brand themselves with a red flag. Given their reputation as wealth-killers, reverse splits simply drive away many investors from ever considering a given stock. If that aversion proves to be irrational -- that is, if investors abandon the stock for dead, even after its business prospects revive -- then it can be potentially quite lucrative for those who keep their eyes open to the opportunities it presents.
All other things being equal, though, companies that get themselves into a position where they need a reverse split have a lot against them from the start. Except in the most extraordinary cases, therefore, investors may be smarter to seek better investments elsewhere.
---
I'm not waffling when I simply say that the big question is whether MannKind Corporation is one of those "extraordinary cases".
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Post by brotherm1 on Jan 28, 2017 11:37:14 GMT -5
How much does it tank once it is announced falconquesf? Can you cite some examples of stocks that tanked right after the announcement and how much they tanked? C split in 2011. It was at $5 and lost half it's share price going from $50 to $25 with in 2 or 3 months I believe. I bought it then, and with in a few months it was back to $50. I was in BZH when it split and it has never recovered. I jumped out of BZH right after they announced it. It lost half it's share price and has still not recovered. I think it's a case by case thing. Just like when dilution is announced people sell. And then jump back in. It's perception IMO usatoday30.usatoday.com/money/perfi/columnist/krantz/2011-05-12-citigroup-reverse-stock-split_n.htmI had also owned citi back then sports I remember Cramer turned me onto that saying it was an unbelievable bargain at $5.00 (yeah right). Anyway, I'm not convinced the reverse split caused it to fall. 2011 was a bad year for bank stocks. Bank of America for example was on the same down trend line as Citi in 2011 and then popped up with Citi the beginning of 2012. |
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Post by otherottawaguy on Jan 28, 2017 12:08:46 GMT -5
My nickles worth on the subject:
My calculation is it will look something like this:
Amount to raise: 12 months operation budget: 120M
Current Value of Company: 600M * 0.67 = 400M (ish)
Reverse Split: 10 for 1
New share count: 60 M @ $6.70
New offering: 30M
New share count: 90M
Resulting Share Price: 400M/90 = 4.44
Offering Price: $4.00 + warrant
Offering Rev: $4 X 30M = $120M
Think that I might want to have a bit of cash around for the dip it will take after the new shares roll out. Or to be able to play if it turns out to be a rights offering. Not sure if I will lighten the current load before the call.
OOG
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Post by agedhippie on Jan 28, 2017 13:45:04 GMT -5
My nickles worth on the subject: My calculation is it will look something like this: Amount to raise: 12 months operation budget: 120M Current Value of Company: 600M * 0.67 = 400M (ish) Reverse Split: 10 for 1 New share count: 60 M @ $6.70 New offering: 30M New share count: 90M Resulting Share Price: 400M/90 = 4.44 Offering Price: $4.00 + warrant Offering Rev: $4 X 30M = $120M Think that I might want to have a bit of cash around for the dip it will take after the new shares roll out. Or to be able to play if it turns out to be a rights offering. Not sure if I will lighten the current load before the call. OOG The benchmark is the Rodman and Renshaw placement which gave a 20% discount to the share price (ignoring the warrants). If the reverse split price gives $4.44 then the placement price will probably be a maximum of $3.55. One possibility is that they will announce the placement priced at the 80% of VWAP for the ten trading days immediately post reverse split so the investors can sidestep any resulting drop from the split. I have offloaded half my position in the last month, I think I will sell down to a quarter position before the call. |
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Post by brotherm1 on Jan 28, 2017 13:59:10 GMT -5
You might be aged but it sounds like you still have nads. I think I'll hold my shares and perhaps average down further eventually if the oppurtunity would present itself. I've been burnt big before several times trying to time trades.
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