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Post by babaoriley on Nov 8, 2017 11:25:01 GMT -5
Tinkerbell,
I've been in MNKD since the IPO. It still pains me that I was not allowed in on that recent offering at $6! They owed me that!
To all:
This "doubling of shares" thing is such a red herring. Almost every public company has way more shares authorized than issued at any particular time. Based on the extraordinary journey of this company, MNKD essentially ran out of authorized shares, to the proper and prudent thing to do is to authorize more, plenty more, why not? Who knows what the future will bring, but it's always prudent to have the ability to issue shares as management (who most really like) sees fit. Do I like dilution? Of course not, but just about every last one of us knows that we need to bring cash in from some source. If all other sources don't provide the necessary funds, then we need to go to the market. I think they did not tap the ATM at $6 or so, because they did not want to bring even more attention (this time from the outside) to the wonderful run-up and sale of the 10 million shares (see, I just mention that offering and I get a pang in the gut - damn, could have had some of those discounted shares).
By the way, I congratulate those who sold some shares yesterday, playing the overwhelming odds that the call would result in a share price debacle. I listened to the call last night, and thought it was pretty good.
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Post by me on Nov 8, 2017 11:26:49 GMT -5
Are you really assuming that approval of the authorization of an additional 140 million shares means that 100% of those newly authorized shares will be flipped in a raise?! They should have gone for much less issued at this time and proved that all these things that supposedly will enable the turn around are actually going to be successful... label change, insurance improvement, TV advertising, etc. They didn't "issue" any shares, they are requesting an authorization for the shares. That was the point of my post. I don't have a crystal ball to predict how many of the 140 million they might issue, except that I am 99.9999% certain they will not issue 140 million.
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Post by dreamboatcruise on Nov 8, 2017 11:35:56 GMT -5
Tinkerbell, I've been in MNKD since the IPO. It still pains me that I was not allowed in on that recent offering at $6! They owed me that! To all: This "doubling of shares" thing is such a red herring. Almost every public company has way more shares authorized than issued at any particular time. Based on the extraordinary journey of this company, MNKD essentially ran out of authorized shares, to the proper and prudent thing to do is to authorize more, plenty more, why not? Who knows what the future will bring, but it's always prudent to have the ability to issue shares as management (who most really like) sees fit. Do I like dilution? Of course not, but just about every last one of us knows that we need to bring cash in from some source. If all other sources don't provide the necessary funds, then we need to go to the market. I think they did not tap the ATM at $6 or so, because they did not want to bring even more attention (this time from the outside) to the wonderful run-up and sale of the 10 million shares (see, I just mention that offering and I get a pang in the gut - damn, could have had some of those discounted shares). By the way, I congratulate those who sold some shares yesterday, playing the overwhelming odds that the call would result in a share price debacle. I listened to the call last night, and thought it was pretty good. Call would have been good IF they had addressed cash flow and capital infusion in a much more serious manner. Baba, I think you've just said more about it than they did. Burning through capital and repeatedly diluting shares only to issue new shares, rinse and repeat with no earnings accretive effect is NOT something companies do. It's not something wall street likes and it probably isn't going to end well. If a company is profitable, sure management has the right to ask for lots of leeway without needing to go back to shareholders for approval. MNKD isn't. Just curious... is there some upper limit that you would have thought bad or is the sky the limit for plenty of shares... 500 million... a billion?
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Post by pantaloons on Nov 8, 2017 11:36:41 GMT -5
Are you really assuming that approval of the authorization of an additional 140 million shares means that 100% of those newly authorized shares will be flipped in a raise?!Actually, I hope at a minimum 100M will be flipped in a raise. Yes I do. At a 23M burn per quarter and to get through years 3 and 4 of this launch, they will need 200M. Why have the agita associated with having to ask shareholders every 3-6 months to authorize more shares? This is pure distraction and one which shorts will take advantage of each and everytime. If the management team is not living up to expectations, get rid of them and hire new and make it sooner rather than later. That's all. Hard launch has commenced and to take advantage of it, they need more people in the field, more approvals around the world. There is no way they can focus on this if every three months they are faced with the spectre of what? Having to lay off good people or getting approval for another raise? Geesh. I just as soon get on with it. If they don't use all of the monies raised how about a forward split where I receive 5 shares for every 1 owned. You know? There's got to be a better way to ensure Afrezza's success. Finally, in my view, if you are going to feast on a pig, you don't start by cutting off one leg at a time, cook it and then cut of another do you? Slaughter it and cook it - ONCE. Sorry but that's how I think this should be done. What makes you think MNKD will not significantly dilute shares beyond the 140M that will be voted on in December? I sincerely hope they don't, but this is the second time in very recent times for this to happen.
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Post by dreamboatcruise on Nov 8, 2017 11:46:31 GMT -5
They should have gone for much less issued at this time and proved that all these things that supposedly will enable the turn around are actually going to be successful... label change, insurance improvement, TV advertising, etc. They didn't "issue" any shares, they are requesting an authorization for the shares. That was the point of my post. I don't have a crystal ball to predict how many of the 140 million they might issue, except that I am 99.9999% certain they will not issue 140 million. Yes, my bad... authorized. Coffee hasn't yet sunk in. So management was foolish enough to ask to authorize 140M, sending stock price sharply down, angering at least some of their investors (who might even vote against it), when there is only a 0.0001% chance they'll need them? Granted right now we're a few million away from having issued the full 140M already authorized, so if you're simply meaning that it unlikely we'll hit that 140M precisely you are right. In reality they'll have some sitting around for the employee stock option pool which are never used. But that is missing the point. How many are you expecting will get used? I guess they'll have your vote, not that you think using the 140M would be wise or fair, but because you just know deep down they wouldn't do that to you... actually use them after you say they can? Just because they've done it before... this time will be different. Management really loves us and I'm sure they are sorry for all the past dilution. Maybe it was really our fault in some way. We could have been better investors. [Yes, I'm beginning to think being a MNKD investor is almost like being a battered spouse]
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Post by babaoriley on Nov 8, 2017 11:49:43 GMT -5
They didn't "issue" any shares, they are requesting an authorization for the shares. That was the point of my post. I don't have a crystal ball to predict how many of the 140 million they might issue, except that I am 99.9999% certain they will not issue 140 million. Yes, my bad... authorized. Coffee hasn't yet sunk in. So management was foolish enough to ask to authorize 140M, sending stock price sharply down, angering at least some of their investors (who might even vote against it), when there is only a 0.0001% chance they'll need them? Granted right now we're a few million away from having issued the full 140M already authorized, so if you're simply meaning that it unlikely we'll hit that 140M precisely you are right. In reality they'll have some sitting around for the employee stock option pool which are never used. But that is missing the point. How many are you expecting will get used? I guess they'll have your vote, not because you think using the 140M would be wise or fair, but because you just know deep down they wouldn't do that to you... actually use them after you say they can? Just because they've done it before... this time will be different. Management really loves us and I'm sure they are sorry for all the past dilution. DBC, I'm gonna cut you some slack cuz you're probably reeling from what's going on in China, and I don't mean with Trump, but consider your last two posts on this thread and consider the situation in which the company finds itself. That's all I'll say.
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Post by dreamboatcruise on Nov 8, 2017 11:55:42 GMT -5
Are you really assuming that approval of the authorization of an additional 140 million shares means that 100% of those newly authorized shares will be flipped in a raise?!Actually, I hope at a minimum 100M will be flipped in a raise. Yes I do. At a 23M burn per quarter and to get through years 3 and 4 of this launch, they will need 200M. Why have the agita associated with having to ask shareholders every 3-6 months to authorize more shares? This is pure distraction and one which shorts will take advantage of each and everytime. If the management team is not living up to expectations, get rid of them and hire new and make it sooner rather than later. That's all. Hard launch has commenced and to take advantage of it, they need more people in the field, more approvals around the world. There is no way they can focus on this if every three months they are faced with the spectre of what? Having to lay off good people or getting approval for another raise? Geesh. I just as soon get on with it. If they don't use all of the monies raised how about a forward split where I receive 5 shares for every 1 owned. You know? There's got to be a better way to ensure Afrezza's success. Finally, in my view, if you are going to feast on a pig, you don't start by cutting off one leg at a time, cook it and then cut of another do you? Slaughter it and cook it - ONCE. Sorry but that's how I think this should be done. I do agree we may be in for a slaughter. If they try to raise $200M now, good luck even getting it sold at $2/share. I couldn't disagree more about strategy, however. I think we could have done multiple smaller raises at ever increasing share price... IF we have progress to show. So the ONLY way I'd agree with you is if management is TOTALLY blowing smoke up our ars*s regarding upcoming script increases, better insurance coverage, international partners, trial results, etc. Maybe management intends to do incremental, I hope so. But if they do, they shouldn't have asked for 140M authorization at this point.
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Post by compound26 on Nov 8, 2017 11:57:36 GMT -5
Yes, my bad... authorized. Coffee hasn't yet sunk in. So management was foolish enough to ask to authorize 140M, sending stock price sharply down, angering at least some of their investors (who might even vote against it), when there is only a 0.0001% chance they'll need them? Granted right now we're a few million away from having issued the full 140M already authorized, so if you're simply meaning that it unlikely we'll hit that 140M precisely you are right. In reality they'll have some sitting around for the employee stock option pool which are never used. But that is missing the point. How many are you expecting will get used? I guess they'll have your vote, not because you think using the 140M would be wise or fair, but because you just know deep down they wouldn't do that to you... actually use them after you say they can? Just because they've done it before... this time will be different. Management really loves us and I'm sure they are sorry for all the past dilution. DBC, I'm gonna cut you some slack cuz you're probably reeling from what's going on in China, and I don't mean with Trump, but consider your last two posts on this thread and consider the situation in which the company finds itself. That's all I'll say. Seems like our dear DBC is having a mini nervous breakdown. Just joking. To me basically nothing has changed from before the CC and after the CC. As for the additionally authorized shares. Think about it, we were trading at $0.67 at some point earlier this year. And before the recent run up to $6 plus and offering at $6, the PPS was around $1-2. So I am happy to think we did an offering at $1 for the capital we recently raised and notes exchanged. Thinking in that way, we would have issued 65 million plus shares to do that, versus around 11 million shares actually issued so far. So, in terms of dilution, I am fine before they ACTUALLY issue another 54 millions out of those 140 million additionally authorized shares. But if these 54 millions shares bring in $200 million plus cash, I am fine with management issue even more shares out of those 140 million additionally authorized shares.
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Post by joeypotsandpans on Nov 8, 2017 12:02:27 GMT -5
Call would have been good IF they had addressed cash flow and capital infusion in a much more serious manner. Baba, I think you've just said more about it than they did. Burning through capital and repeatedly diluting shares only to issue new shares, rinse and repeat with no earnings accretive effect is NOT something companies do. It's not something wall street likes and it probably isn't going to end well. If a company is profitable, sure management has the right to ask for lots of leeway without needing to go back to shareholders for approval. MNKD isn't. Just curious... is there some upper limit that you would have thought bad or is the sky the limit for plenty of shares... 500 million... a billion? In biotech land it is absolutely done on a regular basis (I could give you a plethora of four letter symbols and I'm sure Baba could also lol...sorry Babs didn't mean to pour any salt in any wounds), especially those that are still without a drug/product on the market, we at least have an approved drug that is being marketed and the marketing budget just had the checkbook opened big time. The short side of the equation may think those shares will hit the market right away or at lower prices (which may have happened with the previous mgmt.) but as Kovacocy mentions as well that could be a mistake and again as he mentions would open the door for another little squeeze similar to the last one. The one thing that AF hangs his hat on is that the survival rate and success of biotechs that actually make it and get a "successful" drug to market is very very small so when he bashes them he knows the odds of being correct in their s/p drops and possible demises are very high. The problem he has with MNKD is that it has nine lives....figured I would use that term around here for the cat lovers
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Post by dreamboatcruise on Nov 8, 2017 12:10:01 GMT -5
babaoriley... I'm really surprised there aren't others upset about it. Management is asking for permission to hand half of the my assets in the company over to someone else without first telling me anything about why or when. MNKD hasn't earned that. I own Apple. If Tim Cook asked for a vote to double the number of authorized shares, I'd think "wow, that is amazing that he thinks he could use that many more shares for something productive" but I'd also think "but he's made me a heck of a lot of money and sure knows what he's doing, so who am I to question". I am considering the situation the company finds themselves in. It is a situation where they should not feel the right to put shareholders in the position of needing to vote to authorize 140M new shares not knowing whether it will be sold before the end of the year at $1 a share or largely unused for years. So I guess the answer to my question is that for you it really would not matter how many shares they would have us authorize... sky is the limit? The situation is bad so they should be given complete freedom to arbitrarily dilute without needing to come back for approval. I guess in theory the BoD could even ask for carte blanche.
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Post by alethea on Nov 8, 2017 12:19:34 GMT -5
Are you really assuming that approval of the authorization of an additional 140 million shares means that 100% of those newly authorized shares will be flipped in a raise?! I, and most others, will assume that they wouldn't have picked that number unless they thought they might need that many, and sadly it is probably a self fulfilling prophecy with the mere spectra of 50% dilution driving the share price down and then requiring them to actually sell many more shares to raise the same amount of money. They should have gone for much less issued at this time and proved that all these things that supposedly will enable the turn around are actually going to be successful... label change, insurance improvement, TV advertising, etc. A company with successful track record can easily go to shareholders and request lots of new shares because wall street will trust them. MNKD, sadly, has a track record of quite the opposite... investment decimating dilution. Granted some here have blind faith and wouldn't think issuing a billion more shares bad, but that isn't the way most are going to look at this in light of MNKD's past and in light of the current ongoing operating losses. So how many of these authorized shares are you assuming will end up being issued? And why do you suppose they would have issued 140M, which is bringing down the stock, if your assumption is significantly less than 140M? Is management not bright? Where's the "Thumbs Down" button when you need it?
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Tinkerbell
Researcher
Watcher of the Skies
Posts: 143
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Post by Tinkerbell on Nov 8, 2017 12:54:54 GMT -5
If I may, can I provide a scenario that could (I mean could) have a very positive effect on the price of any number of shares that could be offered say in March of next year or sooner?
First, what if the STAT study of 60 participants shows unequivocally that Afrezza kept the 30 subjects assigned to this arm in normal range during the period following any meal 95% more of the time than Lispro? 75% or even 50% of the time over Lispro? Could that impact the share's value?
Secondly, what if in four weeks the Afrezza group was able to lower their HbA1c by .5 or more where Lispro could not achieve even a .1? Could that impact the share's value?
Thirdly, what if insurers input to the STAT study was this simple: if you can show us those kinds of disruptive results in a controlled clinical trial and within a 4 week period (virtually unheard of), we should be able to see our way to removing pre-authorization but you'll still need to convince the MDs to prescribe it and we're keeping it at a level 3/4.
What then? Have you really delved deep into the STAT study and what could come out of it?
That is why Mike is so adamant about it's completion and reporting of results.
So, as this authorization vote is scheduled for approx. mid December, I would not rule out a well timed press release of preliminary results. I can't say it will happen but I would not rule it out.
In my view, Mike already knows what the data looks like. He said he could not wait until all of the data is in so he could see what the final results look like. He did not say he knew or didn't know what they look like as of yesterday's call. I suspect he knows it is looking extremely positive and so does Kent. I realize this is all conjecture at this point but I have my suspicions and am entitled to them.
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Post by me on Nov 8, 2017 13:08:32 GMT -5
They didn't "issue" any shares, they are requesting an authorization for the shares. That was the point of my post. I don't have a crystal ball to predict how many of the 140 million they might issue, except that I am 99.9999% certain they will not issue 140 million. Yes, my bad... authorized. Coffee hasn't yet sunk in. So management was foolish enough to ask to authorize 140M, sending stock price sharply down, angering at least some of their investors (who might even vote against it), when there is only a 0.0001% chance they'll need them? Granted right now we're a few million away from having issued the full 140M already authorized, so if you're simply meaning that it unlikely we'll hit that 140M precisely you are right. In reality they'll have some sitting around for the employee stock option pool which are never used. But that is missing the point. How many are you expecting will get used?I guess they'll have your vote, not that you think using the 140M would be wise or fair, but because you just know deep down they wouldn't do that to you... actually use them after you say they can? Just because they've done it before... this time will be different. Management really loves us and I'm sure they are sorry for all the past dilution. Maybe it was really our fault in some way. We could have been better investors. [Yes, I'm beginning to think being a MNKD investor is almost like being a battered spouse] It's simple...I don't believe management was foolish in requesting the additional 140 million shares. And I'm not certain why you are implying I thought there might be only a 0.0001% chance they'll use them all...I suggested a 99.9999% certainty they wouldn't use them all only because I didn't want to have to read some of your philosophical BS about whether one can ever be absolutely certain in investing. I can play the same childish game that you are: I'm assuming you'd be comfortable voting to authorize only an additional 3 or 4 shares? Wow, that extra $9.00 to $12.00 will really help the company (and the debate about what the company needs to survive)! What an astute investor and enlightened business person you must be! /sarc Here's the bottom line: The company needs additional authorized shares to conduct its business. This is not something new in the world of publicly traded companies. I fully expect them to use this authorization for business purposes. How many and in what manner(s), I do not know. If you don't like it, then vote against it. If you think your vote means nothing and your investment is a lost cause, then...sell and leave OR keep your shares and continue to regale us with your insightful views on how foolish management is.
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Post by mnholdem on Nov 8, 2017 13:20:16 GMT -5
Another aspect of authorizing shares is that it will provide the company with better leverage when it comes to terms related other financing options. If outside sources of funding are convinced that a company has limited funding choices it's like a shark smelling blood in the water.
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Post by peppy on Nov 8, 2017 13:21:32 GMT -5
If I may, can I provide a scenario that could (I mean could) have a very positive effect on the price of any number of shares that could be offered say in March of next year or sooner? First, what if the STAT study of 60 participants shows unequivocally that Afrezza kept the 30 subjects assigned to this arm in normal range during the period following any meal 95% more of the time than Lispro? 75% or even 50% of the time over Lispro? Could that impact the share's value? Secondly, what if in four weeks the Afrezza group was able to lower their HbA1c by .5 or more where Lispro could not achieve even a .1? Could that impact the share's value? Thirdly, what if insurers input to the STAT study was this simple: if you can show us those kinds of disruptive results in a controlled clinical trial and within a 4 week period (virtually unheard of), we should be able to see our way to removing pre-authorization but you'll still need to convince the MDs to prescribe it and we're keeping it at a level 3/4. What then? Have you really delved deep into the STAT study and what could come out of it? That is why Mike is so adamant about it's completion and reporting of results. So, as this authorization vote is scheduled for approx. mid December, I would not rule out a well timed press release of preliminary results. I can't say it will happen but I would not rule it out. In my view, Mike already knows what the data looks like. He said he could not wait until all of the data is in so he could see what the final results look like. He did not say he knew or didn't know what they look like as of yesterday's call. I suspect he knows it is looking extremely positive and so does Kent. I realize this is all conjecture at this point but I have my suspicions and am entitled to them. 40 days away. the commercials started. Under pressure: www.youtube.com/watch?v=YoDh_gHDvkk
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