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Post by dreamboatcruise on Nov 8, 2017 13:54:25 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 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. Asking the question about how many shares are reasonable, whether you or I, isn't childish. To the contrary it is incredibly relevant because we are being ASKED to vote on it. If for you the answer is any arbitrary amount management asks for, you could just say that. I was fine with the PIPE that just occurred. I would like to think with all the things they are claiming they will accomplish near term, that a new offering would be at or above the PIPE. So at least $6 a share. Hmmm... 25M shares authorized would be $150M at that price. That would get us up to about $200M runway from here. Seems reasonable to me as being an amount that should easily get to profitability or bare minimum a point where the script trajectory would make clear where the company is going and how quickly. So there... I give a real answer and my reasoning. Not childish at all. Or if you're tired of hearing from me, sell your shares and go away. Now that and the comment I'm responding to from you with the giant "or" certainly are childish. My vote may not mean anything but unless there is some better communication from management I do plan to vote against this authorization. Despite being a small time investor, management does have a fiduciary duty to me, and an obligation, though not as clear cut, to communicate. In the meantime I shall regale you (if you choose not to do the simple thing of blocking me if you wish for me to magically go away) with both my positive and negative views of managements actions... especially for topics on which we collectively are being asked to vote. Sharing views on upcoming shareholder votes is one of the few things of actual consequence that can be done on this board. Though, I have no problems with those that wish to create and read threads like "The 10 best things about Afrezza that we've talked about every week for the past 4 years". I would hope, however, that people wouldn't complain about frank discussion of actual shareholder issues... and this thread seems to be an appropriate one to be talking about the upcoming vote. I would not interject this on a thread about the best features of Afrezza, so sticking to those threads is another way of avoiding frank views on real issues facing us.
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Post by alethea on Nov 8, 2017 14:11:34 GMT -5
I will most certainly be voting to allow the additional 140 million.
25 million shares would be WAY too low. Wall Street would tear MNKD apart if it could see that all they had to do was to delay and obstruct thru another 25 million shares. To have done 25 million shares would be MNKD signing its own death warrant.
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Post by dreamboatcruise on Nov 8, 2017 14:19:10 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? What price per share would you view as very positive... what about merely positive for March? You said you wanted to see $200M raised. What is a reasonable number of shares to do that? Personally, I was hopeful about the scenarios you mentioned... though considerably less so now given the number of shares we are being asked to authorize. To me it seems MNKD management aren't themselves confident that they will be offering these shares at a positive, much less very positive price point. It seems like indeed they may be contemplating having to offer shares at the $2 you implied when you mentioned 100M shares and raising $200M would be desirable. You wouldn't consider a down round at $2 a share to be positive would you? I agree that management shouldn't be coming to us every 3 months for new authorization. But doubling the number of shares seems a bit of a blank check; and with basically no communication about it from management, I don't know whether they expect that amount to last them 12 months or still using it years from now with a stock price of $25. Many companies never run out of authorized shares, but MNKD has done that. I think my fears, given the lack of communication from management, are justified. I know management can't make promises, but I think talking about what they envision as the future capital structure of the company, and shareholders being able to judge their performance against that, is very reasonable.
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Post by dreamboatcruise on Nov 8, 2017 14:32:15 GMT -5
I will most certainly be voting to allow the additional 140 million.
25 million shares would be WAY too low. Wall Street would tear MNKD apart if it could see that all they had to do was to delay and obstruct thru another 25 million shares. To have done 25 million shares would be MNKD signing its own death warrant. We had less than 25 million and had a strong run into the PIPE financing, and that isn't even with all of the positive things that are supposedly going to materialize in coming months. Now they announced 140 million shares and the price continues to sink. Seems like Wall Street is tearing into MNKD shares on that news. Just for points of context to try to understand your view... a couple of serious questions: 1) Can you show an example of any other company that doubled number of authorized shares that was greeted with positive Wall Street response (one that was not profitable at the time would be most relevant)? 2) 25M is basically 18% of outstanding. What they are proposing is 100%. In your mind is there ever such a thing as too much? What about WAY too much? Would you be comfortable if the law simply allowed the BoD to arbitrarily increase share count without shareholder approval? Assuming the answer to the last question isn't that you'd be happy with BoD having true carte blanche, in MNKD's situation can you state what the maximum amount you'd vote yes on and give some sort of analytical perspective on why that is your limit? Or for that matter what is the range low to high of what you think prudent since you've declared my number way too low, and assuming you believe in having an upper limit?
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Post by bundy on Nov 8, 2017 14:35:26 GMT -5
IMO even to just have it available I think holding the power of 140million shares makes them a lot stronger than weaker. It gives them a real chance to take us to where we want.
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Post by dreamboatcruise on Nov 8, 2017 14:50:53 GMT -5
IMO even to just have it available I think holding the power of 140million shares makes them a lot stronger than weaker. It gives them a real chance to take us to where we want. Would allowing the BoD to issue an unlimited amount of shares be even better for the company? Or is there a point where you think too many shares would evoke negative consequences from existing and potential shareholders that would actually end up weakening their ability to raise capital?
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Post by seanismorris on Nov 8, 2017 14:52:28 GMT -5
I think MannKind needs the shares to raise cash (yes massive dilution) because they are about to embark on a “balls to the wall” marketing campaign.
That’s the only thing that makes sense with the information we received on the CC.
-x- I’ve called the marketing efforts before “half assed” and correctly so. With the improved Label they can now find out if Afrezza will sink or swim. By March we should know if Afrezza is going to become a billion dollar business, or become a diabetes historical footnote.
I think MannKind has realized that Afrezza all they have, and if Afrezza remains a niche product MannKind won’t survive. So, they’re betting the house today...
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Post by sportsrancho on Nov 8, 2017 15:03:24 GMT -5
I’ll go along with the above^ And add that they have done enough homework to know that it won’t be wasted money:-)
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Post by bundy on Nov 8, 2017 15:03:33 GMT -5
Capital is always an issue however, I think it’s not all about raising capital but it’s also to deter other negative possible scenarios from happening and show that the board has the means.
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Post by pantaloons on Nov 8, 2017 15:06:23 GMT -5
I think MannKind needs the shares to raise cash (yes massive dilution) because they are about to embark on a “balls to the wall” marketing campaign. That’s the only thing that makes sense with the information we received on the CC. -x- I’ve called the marketing efforts before “half assed” and correctly so. With the improved Label they can now find out if Afrezza will sink or swim. By March we should know if Afrezza is going to become a billion dollar business, or become a diabetes historical footnote. I think MannKind has realized that Afrezza all they have, and if Afrezza remains a niche product MannKind won’t survive. So, they’re betting the house today... This is perhaps this thread's most concise and accurate statement regarding the recent news to vote for the authorization of additional shares. It's clear that MNKD management feels confident enough to take the plunge and go big on DTC with hopes of dramatically improving sales. They're basing their prospective plan on their recent sales strategies and label change. I personally would be more comfortable if there was a more compelling growth in scripts, publication of clinical results, and expanded insurance coverage before they took this large (and likely the last) gamble. Suffice it to say, this is more or less their last chance at getting this right. Hold on tight.
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akil
Newbie
Posts: 21
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Post by akil on Nov 8, 2017 15:09:58 GMT -5
If they do sell 140M at say 3$ a share. That would be something like 400M after commission ... about 2.5 years worth of funding at last quarter's burn rate. Interesting. There would then be 280M outstanding shares and a 3$ SP would be 840M Market cap.
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Post by alethea on Nov 8, 2017 15:50:04 GMT -5
IMO even to just have it available I think holding the power of 140million shares makes them a lot stronger than weaker. It gives them a real chance to take us to where we want. Yeah, I think so too. That's the point. Maybe 140 is WAY more than they will need. I hope so. Maybe it's double or triple what MNKD will need. But who knows? Answer: no one. Better to have too much ammunition than not enough. Last time I'll say it, it least for a while. They do NOT have to issue 140 million even though authorized. Maybe they will issue 30 million. Don't know. Time will tell.
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Post by tingtongtung on Nov 8, 2017 16:01:56 GMT -5
140 million additional shares is nothing bad. We dont know what/when/how they are diluting.
MattP/prev management didn't raise money properly (right at Sanofi deal, then went on raising some little cash (<10 mil)). Now that we have a new label and a growing script, our valuation should go up, and hence stock price should go up.
I have no idea how Mike did the 60 mil PIPE transaction. It's more like a miracle (!), or some internal connections (?) than brilliance (atleast IMHO). If stock price moves up with scripts, I have no problem in a 50% haircut (50% when stock is at $8-9..).
If Mike does opposite of MattP, i.e. raise >350 mil with the entire 140 mil new shares, I would be very very scared.. That would be the last straw for MNKD. If they keep hitting targets, that would be THE BEST move, else, that would be the end of MNKD.
But, I'm sure Mike would be looking at raising ~100 mil (abt 3 quarters). That with about 700+ scripts by Jan, new label, STAT study should be good enough to get us a good momentum. Then if we have to dilute at say $20, I'm sure everyone will be OK with it.
But, if we hit $20+, we wouldn't be worried about raising cash for survival. It would be more for fighting hostile takeovers!
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Post by casualinvestor on Nov 8, 2017 16:03:38 GMT -5
DBC, I think you're getting a little too worked up about being kept "In the dark". MNKD can't tell small shareholders their plans, because that amounts to telling EVERYONE their plans. And there are legal, as well a common sense, reasons why they can't do that.
Do I think that 100% dilution is too much? Yes, I think 33-50% would have been much more prudent. And IMO doing it in 3 months would have been smarter than right now. You've posted about how ~18% (25m shares) is enough in your mind.
Do you think that laziness is why they went with 100%? IE, voting for a raise is a pain in the ass, so they'll just arbitrarily double/quintuple what they think the'll need for the coming year...that way they don't have to do it again next year? That doesn't sound like MNKD's management.
Do you think MNKD management is just randomly stupid? Hopefully not.
So...there's a reason why they need a large authorized share increase, beyond wanting to raise $400-$800 million (PPS dependent) and be walking around with a fat bankroll. And there's a reason why they need it sooner rather than later. Acquisition/partnerships are one possible answer. With whom?
And advertising push + more runway is another obvious answer but I don't think it fits the timeframe requirements. Results from their regional test ads are not in yet.
R & D on another pipeline added to the above could be another reason, but why wouldn't they just say that
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Post by dreamboatcruise on Nov 8, 2017 16:09:12 GMT -5
If they do sell 140M at say 3$ a share. That would be something like 400M after commission ... about 2.5 years worth of funding at last quarter's burn rate. Interesting. There would then be 280M outstanding shares and a 3$ SP would be 840M Market cap. Yes, and market caps rarely jump like that from massive dilution. So if they tried to sell 140M shares right now, undoubtedly it would not be at 840M market cap. As long as there is notion/possibility that they may be planning to offer that many shares I have a feeling the price will continue down from here (absent some countervailing news of course).
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