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Post by akemp3000 on Jul 3, 2017 6:21:50 GMT -5
Someone please help explain the offering and implications of the S-1 form warrants to be issued that are exercisable at $7.50 per share until May 12, 2018 for Series A and November 12, 2018 for series B.
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Post by promann on Jul 3, 2017 6:25:53 GMT -5
Someone please help explain the offering and implications of the S-1 form warrants to be issued that are exercisable at $7.50 per share until May 12, 2018 for Series A and November 12, 2018 for series B. You beat me to the punch. Why is seeking alpha getting and giving this news. How come MNKD does not announce it? Somethings fishy says the company will earn 72.5 million.. With these warrants? |
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Post by rockstarrick on Jul 3, 2017 6:32:58 GMT -5
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Post by boca1girl on Jul 3, 2017 6:33:41 GMT -5
You should sign up for email announcements from Mannkind. They issued and email at 6:16am about the warrants and the restatement to the annual report. They are also posted on the corporate website.
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Post by promann on Jul 3, 2017 6:59:16 GMT -5
You should sign up for email announcements from Mannkind. They issued and email at 6:16am about the warrants and the restatement to the annual report. They are also posted on the corporate website. My bad I got that but only read the form 10k the amended annual report and missed the other warrants. Thanks |
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Post by silentknight on Jul 3, 2017 7:04:36 GMT -5
The information is a bit confusing. Are the warrants selling for $7.50 each or is the exercise price $7.50? If the former, who in their right mind would buy a warrant for almost 6X the current share and if the latter, MNKD has a LOT of work to do if they expect at 6x increase in share price by the end of next year.
This looks to be either a) inaccurate or b) poorly thought out.
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Post by kbrion77 on Jul 3, 2017 7:07:20 GMT -5
The information is a bit confusing. Are the warrants selling for $7.50 each or is the exercise price $7.50? If the former, who in their right mind would buy a warrant for 6X the current share and if the latter, MNKD has a LOT of work to do if they expect at 6x increase in share price by the end of next year. This looks to be either a) inaccurate or b) poorly thought out. Haven't read it yet but any type of reverse split language? |
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Post by mnkdfann on Jul 3, 2017 7:10:52 GMT -5
The information is a bit confusing. Are the warrants selling for $7.50 each or is the exercise price $7.50? If the former, who in their right mind would buy a warrant for 6X the current share and if the latter, MNKD has a LOT of work to do if they expect at 6x increase in share price by the end of next year. This looks to be either a) inaccurate or b) poorly thought out. The exercise price. Technically, as the form says, the "Proposed maximum offering price per share". I agree $7.50 is unrealistic, but they need a number for the form. I expect the true exercise price will be below the maximum price that was filed. |
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Post by boca1girl on Jul 3, 2017 7:11:30 GMT -5
It clearly states the exercise price is $7.50 and that there is no guarantee that the warrants will be exercised.
Questions I have:
1. Will the warrants be sold or issued?
2. Who would be willing to pay anything for the warrants today?
3. How does this help our short term financing concerns?
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Post by silentknight on Jul 3, 2017 7:16:58 GMT -5
The information is a bit confusing. Are the warrants selling for $7.50 each or is the exercise price $7.50? If the former, who in their right mind would buy a warrant for 6X the current share and if the latter, MNKD has a LOT of work to do if they expect at 6x increase in share price by the end of next year. This looks to be either a) inaccurate or b) poorly thought out. The exercise price. Technically, as the form says, the "Proposed maximum offering price per share". I agree $7.50 is unrealistic, but they need a number for the form. I expect the true exercise price will be below the maximum price that was filed. I went to the SEC filing instead of SA which is usually just a bunch of nonsense anyway. Can they lower the price? Is that even possible if it's been filed with the SEC? There's no way we'll see $7.50 by next year unless a miracle happens. |
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Post by matt on Jul 3, 2017 7:18:42 GMT -5
The warrants at the terms stated in the S-1 bear no resemblance to fair market value. For reference, the last trade on a Feb 2018 warrant with a $4 strike price was five cents so a May 2018 warrant at a higher strike price is worth something less (without cranking the numbers this early in the morning without the benefit of coffee, it will be somewhere in the three cents range). The price stated may be a function of the rules for computing the registration fee under the Securities Act of 1933 and may not bear any resemblance to the price the company expects to yield (the company can sell at any price, they don't have to price the securities at $7.50).
The other alternative is that some entity has essentially agreed to make a gift to MNKD and buy the warrants regardless of the fair price. That would be highly unusual, but it could happen.
From a purely financial perspective, you can buy a fully paid share will all rights and privileges of a shareholder for $1.41 as of the last close. The worst case scenario for a shareholder is that you can lose that $1.41 plus the interest you could have earned on the strike price of $7.50 (about 7 cents at the risk free rate). Compare that to an option holder who is out $7.50. In the alternative, if the company recovers and to $7 in the next year, the person who bought a share at $1.41 would own a security worth $7 but the option holder is still out the cost of the option ($7.50) would own nothing. That payoff matrix is too asymmetric for the warrants to have any significant value.
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Post by careful2invest on Jul 3, 2017 7:21:46 GMT -5
The exercise price. Technically, as the form says, the "Proposed maximum offering price per share". I agree $7.50 is unrealistic, but they need a number for the form. I expect the true exercise price will be below the maximum price that was filed. I went to the SEC filing instead of SA which is usually just a bunch of nonsense anyway. Can they lower the price? Is that even possible if it's been filed with the SEC? There's no way we'll see $7.50 by next year unless a miracle happens. Maybe that "miracle" can be seen through the "crystal ball" that Mike C referred to. Something that we do not know... Yet! GLTA! |
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Post by boca1girl on Jul 3, 2017 7:25:48 GMT -5
The warrants at the terms stated in the S-1 bear no resemblance to fair market value. For reference, the last trade on a Feb 2018 warrant with a $4 strike price was five cents so a May 2018 warrant at a higher strike price is worth something less (without cranking the numbers this early in the morning without the benefit of coffee, it will be somewhere in the three cents range). The price stated may be a function of the rules for computing the registration fee under the Securities Act of 1933 and may not bear any resemblance to the price the company expects to yield (the company can sell at any price, they don't have to price the securities at $7.50). The other alternative is that some entity has essentially agreed to make a gift to MNKD and buy the warrants regardless of the fair price. That would be highly unusual, but it could happen. From a purely financial perspective, you can buy a fully paid share will all rights and privileges of a shareholder for $1.41 as of the last close. The worst case scenario for a shareholder is that you can lose that $1.41 plus the interest you could have earned on the strike price of $7.50 (about 7 cents at the risk free rate). Compare that to an option holder who is out $7.50. In the alternative, if the company recovers and to $7 in the next year, the person who bought a share at $1.41 would own a security worth $7 but the option holder is still out the cost of the option ($7.50) would own nothing. That payoff matrix is too asymmetric for the warrants to have any significant value. Why would someone buy these warrants? The better bet would be to buy 2019 leaps at the same or lower strike price. I think they will issue these warrants free in conjunction with some other agreement. Maybe Ampastar? |
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Post by therealisaching on Jul 3, 2017 7:34:05 GMT -5
The numbers filed today seem to be the same warrants issued by wainwright in April 2016. They sold Series A Warrants to Purchase 36,407,769 Shares of Common Stock
Series B Warrants to Purchase 12,135,923 Shares of Common Stock
after a 5/1 split the shares are exactly as described today. 7281553 and 2,427,184. Also the 1.50 is 7.50 accounts for the 5/1
Also the beginning of the s-1 states
"This prospectus relates to the offer and sale by us of up to 7,281,553 shares of our common stock issuable from time to time upon exercise of Series A common stock purchase warrants, or the Series A warrants, and up to 2,427,184 shares of our common stock issuable from time to time upon exercise of Series B common stock purchase warrants, or the Series B warrants. The Series A warrants and Series B warrants are collectively referred to as the “warrants”. The warrants were issued by us on May 12, 2016 pursuant to a prospectus dated April 27, 2016 and a related prospectus supplement dated May 9, 2016. The warrants are exercisable at an exercise price of $7.50 per share at any time on or before May 12, 2018 for the Series A warrants and November 12, 2018 for the Series B warrants."
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Post by myocat on Jul 3, 2017 7:39:07 GMT -5
Maybe, it is sold at 5.35xtoday price.
I take it.
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