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Post by thekindaguyiyam on Jan 25, 2018 17:08:42 GMT -5
It really pisses me off and saddens me at the same time to see people talking about loaning their shares out for them to be used to short MannKind. What a disgrace. Nothing against ya'll personally, but damn...just how I feel you're obviously free to do as you wish it's your choice I thought the same thing, right until MNKD diluted 10M shares, and it because obvious that there were going to be plenty of shares around. After loaning my shares out in mid Oct, I've been able to buy almost 20% more shares since then, just using payments from the shorts, and will be buying more with each monthly payment. Best "dividend" stock around... It's like a war where the entity making the money is selling bullets. You sell your bullets and make some cash until you get shot and realize it's in part your participation which kills the company if it isn't strong enough. Then you walk away with your 20% but your investment may have taken a fatal shot (your bullets or not and your investment is dead).
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Post by olebob1 on Jan 25, 2018 18:06:20 GMT -5
Mango, I understand your position completely. I felt the same way for many months until I realized how many on this board were lending shares. Several months ago I realized that I own more shares than the CEO and CFO combined and I make a lot less money, so I decided to make a little interest until the big boys buy a lot more shares. But I also had a day like today in mind. I called Fidelity this morning and called my shares back, just to put a little additional pressure on Shorts. Have you called them back before? Did you give or they ask for a reason? Do you plan to get them loaned out again at some point or pretty sure you wouldn't? I'd be worried if I called them back, I'd get on a black list with the loan dept. I'd love to play the game strategically and call them back during a period like now when the company might be trying to orchestrate a run up for a share offering, but only if I was certain I could get them back in the program. I have not called them back previously, but I've only been a lender for 2 or 3 months. They made it clear that I was still in the lending program and just need to give Fidelity a call if I want to lend again. I will lend again when the dust settles. We will see then if they shut me out.
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Post by dreamboatcruise on Jan 25, 2018 18:11:04 GMT -5
Have you called them back before? Did you give or they ask for a reason? Do you plan to get them loaned out again at some point or pretty sure you wouldn't? I'd be worried if I called them back, I'd get on a black list with the loan dept. I'd love to play the game strategically and call them back during a period like now when the company might be trying to orchestrate a run up for a share offering, but only if I was certain I could get them back in the program. I have not called them back previously, but I've only been a lender for 2 or 3 months. They made it clear that I was still in the lending program and just need to give Fidelity a call if I want to lend again. I will lend again when the dust settles. We will see then if they shut me out. Please do post if so. I've been very curious about that.
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Post by awesomo on Jan 25, 2018 18:21:31 GMT -5
Can we please stop the whole "shorts are destroying MannKind" story.
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Post by boca1girl on Jan 25, 2018 18:23:12 GMT -5
I thought the same thing, right until MNKD diluted 10M shares, and it because obvious that there were going to be plenty of shares around. After loaning my shares out in mid Oct, I've been able to buy almost 20% more shares since then, just using payments from the shorts, and will be buying more with each monthly payment. Best "dividend" stock around... It's like a war where the entity making the money is selling bullets. You sell your bullets and make some cash until you get shot and realize it's in part your participation which kills the company if it isn't strong enough. Then you walk away with your 20% but your investment may have taken a fatal shot (your bullets or not and your investment is dead). I still believe MNKD will succeed in this war.
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Post by mango on Jan 25, 2018 18:46:41 GMT -5
Fidelity asked me to loan my shares and at first, I said no. As the shares continued to fall in value, they asked again about 12 months later. At that point I decided to try to recapture some of my real losses (options expired worthless) while I still held on to my shares. I view it as a DRIP program and have purchased more shares with the interest earned along the way. I don’t think my shares make much difference when you consider 33m shares short. Mango, I understand your position completely. I felt the same way for many months until I realized how many on this board were lending shares. Several months ago I realized that I own more shares than the CEO and CFO combined and I make a lot less money, so I decided to make a little interest until the big boys buy a lot more shares. But I also had a day like today in mind. I called Fidelity this morning and called my shares back, just to put a little additional pressure on Shorts. It's nothing personal against you or anyone else, it's just something I don't agree with because it's not being loyal to the cause behind the company's existence.
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Post by dreamboatcruise on Jan 25, 2018 19:34:12 GMT -5
Mango, I understand your position completely. I felt the same way for many months until I realized how many on this board were lending shares. Several months ago I realized that I own more shares than the CEO and CFO combined and I make a lot less money, so I decided to make a little interest until the big boys buy a lot more shares. But I also had a day like today in mind. I called Fidelity this morning and called my shares back, just to put a little additional pressure on Shorts. It's nothing personal against you or anyone else, it's just something I don't agree with because it's not being loyal to the cause behind the company's existence. So you will never sell any of your shares? That would be disloyal to the cause in the same way, if not more so. Selling not only puts the shares back into circulation but it's you cashing out. Loaning one share does theoretically add one share into circulation, but I'm still long that share and fully rooting for the company to succeed and shorts to lose. If I buy 10,000 shares and that same day loan them out to be shorted, the net effect as far as theoretical share price pressure is simply canceling my own buy... nothing worse. It's almost as if I've placed a side bet on MNKD with a short. No net shares entering the market nor being taken out.
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Post by mango on Jan 25, 2018 20:34:37 GMT -5
It's nothing personal against you or anyone else, it's just something I don't agree with because it's not being loyal to the cause behind the company's existence. So you will never sell any of your shares? That would be disloyal to the cause in the same way, if not more so. Selling not only puts the shares back into circulation but it's you cashing out. Loaning one share does theoretically add one share into circulation, but I'm still long that share and fully rooting for the company to succeed and shorts to lose. If I buy 10,000 shares and that same day loan them out to be shorted, the net effect as far as theoretical share price pressure is simply canceling my own buy... nothing worse. It's almost as if I've placed a side bet on MNKD with a short. No net shares entering the market nor being taken out. Yeah I plan to sell shares when the time is right or if I desperately need some money. I get that it is a side bet, or using the money from shorting to add to a long position. It's cool I get it. Shorting is shorting and I don't really agree with it in general.
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Post by morfu on Jan 25, 2018 20:39:11 GMT -5
Can we please stop the whole "shorts are destroying MannKind" story. Well, I feel attacked by this nonsense and take my right to answer in a free forum! At this point me and maybe others loaned out any mnkd share several years ago. The impact from back then on Mannkind is non-existent, any further share I loan out, I have to buy first.. there is zero impact for Mannkind from that, your accusations are incorrect! What is correct, however, is that I use money I got from the shorts to increase my loaned out share-count about 2% each months.. the stakes are getting higher, at additional no cost for me! I believe that Mannkind will survive, possibly with further dilution, but less than 2% per month so I win! People who whine a lot about the current share price seem to be wanting to sell soon, sure you are long in this stock?
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Post by boca1girl on Feb 1, 2018 12:05:53 GMT -5
Interest paid is ticking up. 24% at Fidelity today. Recent low was 23.625 so not much of an increase.
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Post by casualinvestor on Feb 6, 2018 14:32:22 GMT -5
Schwab just asked for the shares I'd bought since the last time they asked at the end of Dec. One account had as little as 300 shares, so they're digging deep. Although that account has other shares already loaned out, so it's probably very little effort.
But they're still only paying 23%. Anyone know what it costs to borrow shares at Schwab?
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Post by prcgorman2 on Feb 7, 2018 14:32:55 GMT -5
So you will never sell any of your shares? That would be disloyal to the cause in the same way, if not more so. Selling not only puts the shares back into circulation but it's you cashing out. Loaning one share does theoretically add one share into circulation, but I'm still long that share and fully rooting for the company to succeed and shorts to lose. If I buy 10,000 shares and that same day loan them out to be shorted, the net effect as far as theoretical share price pressure is simply canceling my own buy... nothing worse. It's almost as if I've placed a side bet on MNKD with a short. No net shares entering the market nor being taken out. Yeah I plan to sell shares when the time is right or if I desperately need some money. I get that it is a side bet, or using the money from shorting to add to a long position. It's cool I get it. Shorting is shorting and I don't really agree with it in general. I've never been asked to loan my shares (which surprises me a little), but if I were, I'd gladly do it and for the same reasons as you've been reading. But here's another thing to think about, loaning shares is not the only way shorting can occur. It is legal to "naked short" depending on who you are (e.g., a so-called market maker) in order to ensure liquidity (is the argument). What is pure evil though, is illegal naked shorting where the shorting is egregious and the folks shorting are doing it to harm a company, or worse, without regard for the harm they know they're causing. So, naked shorting can be legal or illegal. What is the litmus test used to determine the difference? I think answering this question is the wet dream of crooks indulging in illegal naked shorting. There is no clearly specific guideline. It requires evidence of the naked shorting, and proof of intention to manipulate price in order to harm or illegally gain from the price drop. The SEC and other enforcement agencies appear to be too busy or perhaps it's too hard to chase down illegal naked shorting and prosecute offenders. Try to find 3 examples in the past 20 years of crooked brokers and market-makers hauled to court on charges of illegal naked shorting. Why is it so hard? Two things stand out. First, the evidence is buried in the bowels of the Depository Trust Corporation transaction logging which apparently is either flawed, or otherwise unavailable to the enforcement agencies. (You should be asking yourself why. The most obvious answer that springs to my mind is massive systemic corruption. Don't like conspiracy theories? Me either.) The second challenge is plain old ordinary detective work required to find proof of intent to commit criminal naked shorting. Only an idiot or a person with reason to believe they're immune would more or less openly commit the crime and leave evidence strewn about. Cramer may be an example. (Search for deep capture and Overstock.com.) Not sure which camp Cramer would fall into but given his wealth, fame, and education, it isn't obvious to me he's in the first camp. A couple more things to consider here. What is the evidence of illegal naked shorting? Well, in the case of MNKD, I would argue it is a number of things. First is the very lopsided Short Interest Rate. MNKD is a little company. Their stock is not hugely volatile. And it would be hard to argue that it's simply way overpriced and has been for an extended period (not that being overpriced for an extended period is an excuse for illegal naked shorting - they're just reasons why short interest might accumulate). So the unusually high SIR is one indicator. What's another? The number of times MNKD has appeared on the SEC's Regulation SHO Failure To Deliver list which IS direct evidence that naked shorting occurred. It just isn't direct evidence it was illegal naked shorting. I would also suggest social media trolls (e.g., Frag on Yahoo! Conversations) who are so very obviously bashing MNKD in order to manipulate and depress the stock price, as an indicator of increased likelihood of predatory financial practices. Trolls like Frag are not there to help naive investors. In fact Frag regularly belittles "retail" investors as "bag holders" (in the case of MNKD specifically). So, all of this just to say, shorting I understand. It's a bet just like investing in a security and expecting it to appreciate in value is a bet. MNKD is, even after all this time, a pharma start-up. Nobody expects MNKD pay dividends at this stage of their maturity and sales revenue. So, buying and holding MNKD means you expect the stock to appreciate in price (eventually). The fact that loaning shares potentially helps crooks is unfortunate, but I assume it is unlikely shareholders loaning shares and earning interest will bring MNKD down. MNKD will succeed or fail based on many more factors.
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Post by liane on Feb 7, 2018 14:56:44 GMT -5
prcgorman2 - FYI - a few paragraph breaks would be appreciated for these tired eyes!
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Post by dreamboatcruise on Feb 7, 2018 18:47:29 GMT -5
Yeah I plan to sell shares when the time is right or if I desperately need some money. I get that it is a side bet, or using the money from shorting to add to a long position. It's cool I get it. Shorting is shorting and I don't really agree with it in general. I've never been asked to loan my shares (which surprises me a little), but if I were, I'd gladly do it and for the same reasons as you've been reading. But here's another thing to think about, loaning shares is not the only way shorting can occur. It is legal to "naked short" depending on who you are (e.g., a so-called market maker) in order to ensure liquidity (is the argument). What is pure evil though, is illegal naked shorting where the shorting is egregious and the folks shorting are doing it to harm a company, or worse, without regard for the harm they know they're causing. So, naked shorting can be legal or illegal. What is the litmus test used to determine the difference? I think answering this question is the wet dream of crooks indulging in illegal naked shorting. There is no clearly specific guideline. It requires evidence of the naked shorting, and proof of intention to manipulate price in order to harm or illegally gain from the price drop. The SEC and other enforcement agencies appear to be too busy or perhaps it's too hard to chase down illegal naked shorting and prosecute offenders. Try to find 3 examples in the past 20 years of crooked brokers and market-makers hauled to court on charges of illegal naked shorting. Why is it so hard? Two things stand out. First, the evidence is buried in the bowels of the Depository Trust Corporation transaction logging which apparently is either flawed, or otherwise unavailable to the enforcement agencies. (You should be asking yourself why. The most obvious answer that springs to my mind is massive systemic corruption. Don't like conspiracy theories? Me either.) The second challenge is plain old ordinary detective work required to find proof of intent to commit criminal naked shorting. Only an idiot or a person with reason to believe they're immune would more or less openly commit the crime and leave evidence strewn about. Cramer may be an example. (Search for deep capture and Overstock.com.) Not sure which camp Cramer would fall into but given his wealth, fame, and education, it isn't obvious to me he's in the first camp. A couple more things to consider here. What is the evidence of illegal naked shorting? Well, in the case of MNKD, I would argue it is a number of things. First is the very lopsided Short Interest Rate. MNKD is a little company. Their stock is not hugely volatile. And it would be hard to argue that it's simply way overpriced and has been for an extended period (not that being overpriced for an extended period is an excuse for illegal naked shorting - they're just reasons why short interest might accumulate). So the unusually high SIR is one indicator. What's another? The number of times MNKD has appeared on the SEC's Regulation SHO Failure To Deliver list which IS direct evidence that naked shorting occurred. It just isn't direct evidence it was illegal naked shorting. I would also suggest social media trolls (e.g., Frag on Yahoo! Conversations) who are so very obviously bashing MNKD in order to manipulate and depress the stock price, as an indicator of increased likelihood of predatory financial practices. Trolls like Frag are not there to help naive investors. In fact Frag regularly belittles "retail" investors as "bag holders" (in the case of MNKD specifically). So, all of this just to say, shorting I understand. It's a bet just like investing in a security and expecting it to appreciate in value is a bet. MNKD is, even after all this time, a pharma start-up. Nobody expects MNKD pay dividends at this stage of their maturity and sales revenue. So, buying and holding MNKD means you expect the stock to appreciate in price (eventually). The fact that loaning shares potentially helps crooks is unfortunate, but I assume it is unlikely shareholders loaning shares and earning interest will bring MNKD down. MNKD will succeed or fail based on many more factors. I guess I would dispute some of your assumptions. Illegal manipulation of stocks I think is a separate issue from naked shorting. Stocks can be manipulated in both directions and the same sort of factors are involved to determine if illegal manipulation occurs. Wishing to profit from having a company fail and thus have the price go down is no worse from a legal perspective than wishing a company succeeds and thus have the price go up... neither is trashing vs hyping from a legal perspective. Naked shorting is when a short occurs when the stock has not already been verified as available for borrowing before the settlement date. Market makers do have laxer rules regarding the need to locate shares to borrow. Failing to deliver a shorted share on settlement date triggers processes that resolve the situation. A failure to deliver does not necessarily mean there was an underlying naked shorting situation... i.e. shares could have been located that for some reason then disappeared. Certainly in the past it has been shown that true Naked Shorting has been done where brokers were allowing larger quantities of shorting to occur than the number of shares to borrow they actually could locate. That violates regulations but doesn't have anything to do with what the person(s) doing the shorting had as their intent. Afterall, anyone shorting is hoping the stock goes down and thus financially gain from the price drop. I don't see a valid argument as to why a high open short interest would be evidence of some particular problem with naked shorting. Open short interest could be unlimited with absolutely no naked shorting as long as you continue to have buyers that are taking the shorted shares and willing to loan them back out once again. Theoretically this could go on until open short interest is more than the actual number of issued shares... with not a single naked share short needed in the process. SHO likely is an indication of naked shorting. Though if there is a change in shares available to borrow it wouldn't even have to be from naked shorting. If I had a million shares held with fidelity that weren't loaned out on a Monday but were in the share loan program, another Fidelity client could short one million on Monday with Fidelity validly having located the million shares to borrow (my shares)... i.e. a short not a naked short. If on Tuesday, before the settlement date, I tell Fidelity I am withdrawing my shares from the loan program, the shares that were shorted by the other guy might indeed be a failed delivery on settlement date if another million could not be located in the meantime. This situation is not a naked short, yet a SHO failure occurred. I also think part of the problem is that the system for located shares to borrow is perhaps set up in a lax manner that allows lots of volume to fall into a grey area where the involved parties did what the system requires to locate the shares (technically not naked shorting) and yet the shares end up not really being there or having been double counted. That's not really illegal, though if happening it needs fixing. BTW: with the relatively small number of shares I have with Schwab I had to ask to get them in the program, not the other way around.
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Post by prcgorman2 on Feb 8, 2018 11:30:49 GMT -5
I said naked shorting is legal, depending upon how it occurs and by whom. And you've described most the processes whereby a naked short can occur and is accounted for ultimately. I've been following this stock for some years now, and there have been what look to be shorting raids to depress the stock price, followed by FTD listing sufficient to engage SHO; multiple times. MNKD management (Matt Pfeffer) said more than once they'd been in contact with the SEC about issues and indicated the SEC was investigating. In addition to short raids, there have been examples of what was claimed (by bloggers monitoring Level II information) to be bid/ask widen spread pitch-and-catch transactions which occurred with such rapidity as to temporarily stabilize a MNKD stock price increase. It looks like rapid flat jitter on a day's stock price chart. This also has happened many times. I will argue both of these (naked shorting, bid/ask widen spread) are indicators [if not actual proof] of illegal stock price manipulation. Adam Fuerstein called MannKind a "battleground stock". All this to say that in addition to the indicators (which I freely admit are not irrefutable proof) that I previously listed, I personally believe this stock has had it's price manipulated (mostly down), multiple times. That being said, I don't think retail investors (or even some institutions) which short this stock are doing anything inherently evil. And neither are the buy-and-hold investors which loan their shares. What I would like is if the SEC did actually investigate, did find proof, and did prosecute the offenders. Failing that, I would like the SEC or Congress to change the DTCC reporting requirements such that naked shorting was not able to be obfuscated. I assume that is technically and Constitutionally possible. Anyway, I hope mango doesn't continue to feel bad because of investors loaning shares for shorting.
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