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Post by lakon on Feb 9, 2017 14:53:01 GMT -5
Additionally, Al disliked the short interests. Effecting a R/S to dry up supply of the stock would help to reduce interest in shorting MNKD. Furthermore, a sufficiently structured rights offering along with a debt restructuring could be very painful for the short interests. Any dilution could be controlled while keeping the supply of shares low. The idea would be to force the shorts out of their positions. Launching a number of initiatives that bring good news and growth quarter over quarter would grow demand for the stock while the supply is constrained. Under normal circumstances, I am not a fan of a reverse split, but under this circumstance, I see the need to reduce the number of shares to put the equity in a better position for growth. Take your lumps and hold if you ask me because one cannot easily predict when good news may be released.
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Post by lakon on Feb 9, 2017 15:03:02 GMT -5
In the following order:
I want a 1:10 ratio r/s completed.
I want The Mann Group debt forgiven, restructured, or swapped for equity.
I want a rights offering.
Then, it's time to deal with Deerfield debt. I expect the payments for this year to be made along with a restructuring to push subsequent payments out.
Finally, SELL SELL SELL and GROW GROW GROW those prescriptions.
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Post by seanismorris on Feb 9, 2017 15:13:09 GMT -5
From the tone of the CC I'd say the R/S is almost guaranteed. I think MannKind was expecting the property sale to generate more buzz and they hoped the previous contracted sales effort had created more traction, then they could build on that with the internal sales force.
The problem is the first sales effort did nothing, and many docs that knew about Afrezza think it's been pulled because Sanofi bailed.
I also think they underestimated how long it would take to get a news sales team hired and up to speed. What the stock price is factoring in is even with the property sale (with the delayed "relaunch") MannKind is still going to run out of cash; even if the new sales team gets some traction.
When comparing Afrezza situation to other drug launchs, I think many figure 1-2 years before breaking even. From the CC, I figure the "relaunch" starts now... Anyone can do the math regards to the cash burn.
So, the only question is when is the dilution? Not if... I can see advantages of waiting, hoping for scripts to pick up, so there is less dilution (assuming new shares issued). But, if Matt is less confident in Afrezza and is looking to survive until the pipeline builds out... then dilution happens immediately after the R/S. (< 1month)
We don't know what Matts thinking, so I'd only buy on scripts increasing.
I don't know about adding to a Long position after the R/S. MannKind needs to do a lot before (my) confidence is rebuilt, but maybe there is a trade opportunity. Unfortunately MannKind's poor past execution has resulted in more of my trades loosing money, than not. Trading MNKD by looking at the technicals also hasn't worked. This stock is about the fundamentals (scripts) so I'd look there for your answers.
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Post by me on Feb 9, 2017 15:16:47 GMT -5
Additionally, Al disliked the short interests. Effecting a R/S to dry up supply of the stock would help to reduce interest in shorting MNKD. Furthermore, a sufficiently structured rights offering along with a debt restructuring could be very painful for the short interests. Any dilution could be controlled while keeping the supply of shares low. The idea would be to force the shorts out of their positions. Launching a number of initiatives that bring good news and growth quarter over quarter would grow demand for the stock while the supply is constrained. Under normal circumstances, I am not a fan of a reverse split, but under this circumstance, I see the need to reduce the number of shares to put the equity in a better position for growth. Take your lumps and hold if you ask me because one cannot easily predict when good news may be released. lakon, I'm not even sure what I just read. I'd appreciate it if you could clear up some issues. First, how does a RS to "dry up supply of the stock," "...reduce interest in shorting MNKD?" Secondly, what debt restructuring are you referring to? And why would there need to be a "sufficiently structured rights offering" to make a debt restructuring painful to shorts?! If the debt were restructured, say, that each dollar of debt on the books were exchanged for one-tenth share of stock, then this could be very painful for shorts, with no need for a rights offering. And what does it actually mean to say, "dilution could be controlled while keeping the supply of shares low?!" Yes, I agree that launching a number of (positively strong) initiatives and growth QoQ would grow demand for the stock, but the constraint of the supply would be solely due to holders being reticent to sell, not the fact that there is a lesser number of shares available due to any RS. Finally, how exactly does the pure action of a RS "put the equity in a better position for growth?" Does it improve their sales/deal structure/partnerships/product approvals/foreign approvals?
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Post by matt on Feb 9, 2017 17:54:08 GMT -5
IF, and it's a BIG IF, Mann affiliates can participate fully plus subscribe for those declined by existing shareholders, it could be a tacit approval for taking a majority stake and going private. If enough shareholders declined with an equitable distribution algorithm, it could turn out that the Mann Trust controls the entire company. Soon we will know how much farther Mann affiliates will go to see this through. I'm excited to find out. 51% control is not sufficient to take a company private. Once you have registered shares, you are public, and you can't stop being public until your shareholder count OR your total assets drop below SEC specified thresholds. The easiest way is to get rid of all the small shareholders, but you can't force a squeeze out unless there is control of nearly all shares. The squeeze out requirement varies by jurisdiction but if my memory serves me the requirement is 90% for Delaware corporations.
The problem with the Mann Group is that at this point many of the pieces are controlled by trustees other than the family, and those trustees have legal obligations to the various beneficiaries of the individual trusts. What Al might have been willing to do during his life, as grantor of the trusts, the trustees may not be able to do now that he is gone (which is sort of the whole point of creating a trust). Given the track record of this company, I think a trustee would have a hard time investing another penny into MNKD stock whether directly or by converting debt to equity unless there was some very unusual language in the trust agreements. As the trust companies can be sued for breach of fiduciary obligation by the beneficiaries, and many of those trust companies are branches of banks with deep pockets, trustees are usually extremely conservative.
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Post by mnkdnewb on Feb 10, 2017 0:22:56 GMT -5
Chances are the R/S will happen.. and I am in the camp that says it will have to be a 1:10 .. I believe a 1:3 was suggested to ease some fear .. I say this because of the lack of confidence I heard in managements voices the day they announced.. also they have seemed too reactive and defensive .. If there was some other plan in the works I would think they would be a bit more confident... especially Mike C who has shown a great deal of confidence in the past .. but I didn't hear that so much during the announcement .. I also believe the R/S will be executed right away to prepare for the dilution they will need... My question is will it be enough... they need to start advertising asap ... large scale... I have been averaging down all this past year ... my average was 3.80 and now it is 1.25 .. I believed it would pop above a buck .. unfortunately that didnt happened... I agree other than I wouldn't be surprised if they waited about 2-3 weeks. This would pretty well assure they'd be in compliance with Nasdaq rules. I really think they are going to dilute WAY more than people think. I see this as their last shot / get tons of cash and go for broke - which at this point wouldn't be the worst idea. "Blow" it on salespeople, tv ads, magazines, tv spots or whatever. They unfortunately don't have time on their side and just need to prove it will sell in order for any partners to be interested in afrezza or other to applications
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Post by buyitonsale on Feb 10, 2017 1:31:16 GMT -5
If Al was alive he would not let this market push him around. I do not know what his trust was instructed to do but someone that wants to protect their 37% stake in MNKD could put a floor on SP at .50 and buy up most of outstanding shares (that are for sale) for 100M or less. Shorts would disappear and stock would rise. I cannot imagine that Al would not protect this important product. Diabetes is prominently featured on the AMF website. Foundation cannot abandon their mission and let Afrezza get into wrong hands.
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Post by boca1girl on Feb 10, 2017 7:15:47 GMT -5
When will the company send out the request (proxy) to vote on the r/s?
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Post by sportsrancho on Feb 10, 2017 7:21:38 GMT -5
When will the company send out the request (proxy) to vote on the r/s? I believe the vote is on the 24th. So some time next week...
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Post by nadathing on Feb 10, 2017 8:12:24 GMT -5
If Al was alive he would not let this market push him around. I do not know what his trust was instructed to do but someone that wants to protect their 37% stake in MNKD could put a floor on SP at .50 and buy up most of outstanding shares (that are for sale) for 100M or less. Shorts would disappear and stock would rise. I cannot imagine that Al would not protect this important product. Diabetes is prominently featured on the AMF website. Foundation cannot abandon their mission and let Afrezza get into wrong hands. We had 131 million short shares at one point when Al was CEO. The market pushed him around hard and he was not able to deal with it. Al should have hired a sharp CEO years ago and stuck to doing what he did best behind the scenes.
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Post by agedhippie on Feb 10, 2017 9:08:33 GMT -5
If Al was alive he would not let this market push him around. I do not know what his trust was instructed to do but someone that wants to protect their 37% stake in MNKD could put a floor on SP at .50 and buy up most of outstanding shares (that are for sale) for 100M or less. Shorts would disappear and stock would rise. I cannot imagine that Al would not protect this important product. Diabetes is prominently featured on the AMF website. Foundation cannot abandon their mission and let Afrezza get into wrong hands. As soon as it becomes known that you are doing this the shorts will pile in selling stock to the Foundation until the Foundation runs out of money at which point the price drops below the floor and the shorts clean up. You end up with lots of rich shorts and an impoverished Foundation. Not to say that you cannot set a floor, Buffet did this with Berkshire, but the market has to believe you can deliver which it does with Buffet.
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Post by buyitonsale on Feb 10, 2017 9:34:16 GMT -5
If Al was alive he would not let this market push him around. I do not know what his trust was instructed to do but someone that wants to protect their 37% stake in MNKD could put a floor on SP at .50 and buy up most of outstanding shares (that are for sale) for 100M or less. Shorts would disappear and stock would rise. I cannot imagine that Al would not protect this important product. Diabetes is prominently featured on the AMF website. Foundation cannot abandon their mission and let Afrezza get into wrong hands. As soon as it becomes known that you are doing this the shorts will pile in selling stock to the Foundation until the Foundation runs out of money at which point the price drops below the floor and the shorts clean up. You end up with lots of rich shorts and an impoverished Foundation. Not to say that you cannot set a floor, Buffet did this with Berkshire, but the market has to believe you can deliver which it does with Buffet. There are about 325M shares total that are not owned by insiders. Yes, they can set the floor for about 160M max. You obviously would only do it if you had the means. 325 GTC orders Buy MNKD 999999 at .50 limit What will market do then?
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Post by otherottawaguy on Feb 10, 2017 9:42:44 GMT -5
I had a quick chat back and forth with another member here on the board and came to the following conclusion:
If the R/S is 1:3 then no dilution, solid funds are around the corner, they are just avoiding delisting. Might even be able to an extension if this is the case.
If the R/S is 1:10 then dilution is to follow. Not sure if will be a full years expenses, or will come in dribs and drabs as required once the cash runway starts to run empty.
OOG
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Post by derek2 on Feb 10, 2017 9:46:44 GMT -5
Additionally, Al disliked the short interests. Effecting a R/S to dry up supply of the stock would help to reduce interest in shorting MNKD. Furthermore, a sufficiently structured rights offering along with a debt restructuring could be very painful for the short interests. Any dilution could be controlled while keeping the supply of shares low. The idea would be to force the shorts out of their positions. Launching a number of initiatives that bring good news and growth quarter over quarter would grow demand for the stock while the supply is constrained. Under normal circumstances, I am not a fan of a reverse split, but under this circumstance, I see the need to reduce the number of shares to put the equity in a better position for growth. Take your lumps and hold if you ask me because one cannot easily predict when good news may be released. Re: short interest: Float expansion since 2010 due to short interest: 100M shares Float expansion since 2010 due to management-ordered dilution: 400M shares Management has, since then, issued hundreds of millions of shares worth of warrants (protecting shorts) in concert with private placements, debt deals that allowed shorting and discounted conversion to lock in profits. For a company that hates shorts, management has certainly pandered to them. A more realistic assessment is that the CFO (now CEO) understands the facilitative role that shorting plays in corporate finance and investing, but chooses to say the opposite to those that don't understand it.
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Post by slugworth008 on Feb 10, 2017 9:50:20 GMT -5
I'm curious to know what people think the likelihood of dilution is after the R/S? If people believe it will happen, how soon do you expect it? As crazy as it sounds, I actually might use the R/S as a chance to average down (more). Obviously, dilution would be disastrous for current shareholders and buying before the dilution would be stupid. Just trying to time a possible purchase correctly and take advantage of MNKD's weakness, assuming they can eventually right the ship. *I caveat this by saying that I realize that I'm incredibly stupid for even thinking of investing more money in to MNKD, seeing how I'm six figures underwater. I'm so far in the hole, my warped logic can almost convince me that averaging down my share price to under $2 might actually pay off if we can sell Afrezza to more people nationwide in a week than your average local Chipotle serves in an afternoon. It's a sad state of affairs. I believe it will happen and we will also have dilution. I don't think there have been any talks of partnering or overseas deals. US sales is our only shot at the title and by the time those grow, which I believe they will, it will be too late to make any real money off of this investment. I only hope I can get back to even. Wonder what Nate thinks about MNKD now? Could something happen to stave off the R/S - certainly. But given the results from the past 3 years - I believe it's highly unlikely.
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