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Post by Deleted on Jan 12, 2018 13:32:55 GMT -5
This is an opinion Spencer Osborne posted in a comment.
"I will use the latest capital raise as an example.
They sold 10 million shares at $6 each to raise $60 million.
Those investors could be investing in the potential of Afrezza....BUT
Those investors could be simply making a play....short at $6.70, collect $67 million, invest at $6 spending $60 million....net $7 million for a quick days work. Investors make a quick buck, MannKind gets some needed cash, average shareholders/retail investors take it on the chin because the price was quickly halved.
The Wall Street game can be a very brutal place"
I have to admit it sounds reasonable.
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Post by sportsrancho on Jan 12, 2018 14:00:24 GMT -5
If you’re going to keep posting this stuff I’ll start posting all the other stuff he says and we can give him all the intention you want to give him:-)
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Post by Deleted on Jan 12, 2018 14:06:51 GMT -5
Just posting a possibility that sounds reasonable; I am hoping that is NOT what transpired. If you have anything to the contrary I would like to hear it.
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Post by sportsrancho on Jan 12, 2018 14:12:28 GMT -5
It’s not that it doesn’t sound reasonable, and I know he says he writes to traders not investors. But it’s just more fuel added to the fire. It’s just not relevant when you’re looking at the big picture, huh? Like Nate says, it’s up and to the right:-)
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Post by awesomo on Jan 12, 2018 14:19:18 GMT -5
That would involve hitting the absolute peak and then calling up MannKind and getting a deal done instantly at $6.
It would seem way easier and much more lucrative just to short at $6+ knowing the reason why the rise happened was because of the plan to sell shares.
But he is right that the common shareholder is at the mercy of what the big money wants to do.
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Post by figglebird on Jan 12, 2018 14:38:15 GMT -5
build it and they will come - from all sorts of places - with all kinds of motives - as a long term investor, what is the difference where the funding comes from - the upside to this theory if true is that it would likely happen again when/if necessary - one man's insulin is another man's dice game - keep the lights on - pediatric approval is the only thing I see that really matters here.
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Post by casualinvestor on Jan 12, 2018 15:00:25 GMT -5
The buildup still has me interested. What exactly happened to drive up the PPS? One part of it could have been that a large holder of shares (or a few) who lent them out to short, pulled those shares back. This caused all sorts of problems for the shorts, raising the cost of shorting shares, causing some to buy shares to cover. Now combine this with good label news. A short squeeze happened.
Supporting tidbits:
1) Cost of borrowing shares to short went up well before the spike in PPS (http://mnkd.proboards.com/thread/8514/loan-rate?page=3)
2) Nate also posted that people should call back their lent shares. Could have been a reactive move, but still...
3) Schwab called me (a relative small shareholder) asking for all my shares. He implied that they were calling even smaller shareholders too
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Post by cjm18 on Jan 12, 2018 15:36:25 GMT -5
If true then the thesis of “what did those investors think they knew if they were willing to pay 6 dollars” is wiped out. They knew they could make big money on little risk.
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Post by matt on Jan 12, 2018 15:56:21 GMT -5
Just posting a possibility that sounds reasonable; I am hoping that is NOT what transpired. If you have anything to the contrary I would like to hear it. That is precisely how most PIPE transactions are executed. The bankers get a package of securities price to sell, typically based on Monday's market close. The selling team at the bank hits the phones first thing Tuesday morning to find buyers for the securities at the discounted price offered. Once an individual buyer has committed to participate in the deal, they can short the stock without it being considered a naked short because at that moment they have a bona fide economic exposure to the underlying stock. Contracts are confirmed and funds are wired on Wednesday, and the money is release to the company and the shares to the investors either late Wednesday or Thursday. This is frequently called an "overnight close" even though it actually takes 2-3 days. If the PIPE investors sold short well above $6, that is free money because they can cover the short with the newly delivered shares. They make the difference between the short price and the deal price in a period of about 48 hours with minimal risk (the only risk is that the company does not deliver the shares; I cannot a recall an example of that happening for a NASDAQ stock). Not all PIPES are shorted in this way, but many are, and especially so for certain banks such as Rodman & Renshaw, and Wainwright. Follow the market for a while and you will know which investment banks specialize in funding PIPES in this manner. A good place to start is to see which companies present at the Rodman & Renshaw conference in late September or early October; they are there for a reason. Don't take my word for it; research companies that have done large PIPES and you can normally see an up-tick in volume a day or two before the deals are announced. If you see increasing volume with decreasing price for no obvious reason don't be surprised to see a financing announced a few days later. The problem with many PIPE investors is that they don't care about the company, its industry, its business, or its strategy. They want to make a quick 10% profit for doing the deal, which is relatively simple to accomplish, and they have their money back almost immediately so they can do multiple PIPES with the same capital. Sure, 10% is a small return relative to the potential, but most investors will take a guaranteed 10% for tying up their money for about a week. If they can participate in 10 such deals a year, they are looking at close to 100% return on that part of their portfolio. In many cases the investor gets warrants as well as a discount, and those can be held for future gain. Who gets the deals? Only those big investors that can be relied on to participate in any deal the investment bank presents, and some of the discount is to compensate favorite customers for IPO or secondary offerings that did not work out. A PIPE placed off an S-3 shelf registration is not bullish the way a true underwritten secondary offering is. Both are secondary offerings but the investor quality is quite different. Like Spencer says, Wall Street can be a brutal place. He is entirely right on that point. |
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Post by wsulylecoug on Jan 12, 2018 16:50:09 GMT -5
New Year's resolution...read no SO.
Why?
If you are looking for reasons to doubt that MNKD's past deals, arrangements, agreements, negotiations have enabled them to be successful down the road, SO will provide those for you on a weekly basis either in his articles, blog or responses to comments.
If you are looking for reasons to doubt that MNKD is heading in the right direction with it's pipeline, marketing moves, trials, studies, SO will provide those for you on a weekly basis either in his articles, blog or responses to comments.
If you are looking for reasons to doubt that MNKD is right where they need to be with scripts, debt, cash-on-hand, available shares, SO will provide those for you on a weekly basis either in his articles, blog or responses to comments.
If you are looking for assurance that your long-term investment is in the hands of competent management with a plan that continues to be executed with each quarter, SO will not...fill in the blank.
If you are looking for assurance that Afrezza is potentially game-changing to millions of PWD, SO will not...
I read a fair bit of SO in 2017, never finished an article with a positive feeling. I'm a buy-and-holder and if that fits your MO, no SO goes a long way for some peace of mind. Just sayin...
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Post by alethea on Jan 12, 2018 17:00:06 GMT -5
To: Matt
I would have greatly appreciated this post on the day after Oct 5th when MNKD traded 78 million shares. And then 36 million shares the day after that.
PERHAPS I would have been smart enough to sell my shares.
As wonderfully intelligent and educated and experienced in these matters as you obviously are, presumably you DID sell any shares you owned.
But you will never tell us, will you?
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Post by wsulylecoug on Jan 12, 2018 17:07:23 GMT -5
Didn't sell any. Looking back, sure it would have been great to sell at 6.96 and then rebuy at 2.25, but as I said, I'm a buy and holder and the stories not over.
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Post by mnholdem on Jan 12, 2018 17:44:06 GMT -5
Just posting a possibility that sounds reasonable; I am hoping that is NOT what transpired. If you have anything to the contrary I would like to hear it. That is precisely how most PIPE transactions are executed. The bankers get a package of securities price to sell, typically based on Monday's market close. The selling team at the bank hits the phones first thing Tuesday morning to find buyers for the securities at the discounted price offered. Once an individual buyer has committed to participate in the deal, they can short the stock without it being considered a naked short because at that moment they have a bona fide economic exposure to the underlying stock. Contracts are confirmed and funds are wired on Wednesday, and the money is release to the company and the shares to the investors either late Wednesday or Thursday. This is frequently called an "overnight close" even though it actually takes 2-3 days. If the PIPE investors sold short well above $6, that is free money because they can cover the short with the newly delivered shares. They make the difference between the short price and the deal price in a period of about 48 hours with minimal risk (the only risk is that the company does not deliver the shares; I cannot a recall an example of that happening for a NASDAQ stock). Not all PIPES are shorted in this way, but many are, and especially so for certain banks such as Rodman & Renshaw, and Wainwright. Follow the market for a while and you will know which investment banks specialize in funding PIPES in this manner. A good place to start is to see which companies present at the Rodman & Renshaw conference in late September or early October; they are there for a reason. Don't take my word for it; research companies that have done large PIPES and you can normally see an up-tick in volume a day or two before the deals are announced. If you see increasing volume with decreasing price for no obvious reason don't be surprised to see a financing announced a few days later. The problem with many PIPE investors is that they don't care about the company, its industry, its business, or its strategy. They want to make a quick 10% profit for doing the deal, which is relatively simple to accomplish, and they have their money back almost immediately so they can do multiple PIPES with the same capital. Sure, 10% is a small return relative to the potential, but most investors will take a guaranteed 10% for tying up their money for about a week. If they can participate in 10 such deals a year, they are looking at close to 100% return on that part of their portfolio. In many cases the investor gets warrants as well as a discount, and those can be held for future gain. Who gets the deals? Only those big investors that can be relied on to participate in any deal the investment bank presents, and some of the discount is to compensate favorite customers for IPO or secondary offerings that did not work out. A PIPE placed off an S-3 shelf registration is not bullish the way a true underwritten secondary offering is. Both are secondary offerings but the investor quality is quite different. Like Spencer says, Wall Street can be a brutal place. He is entirely right on that point. The scenario you just presented couldn't apply in the case of MannKind because H.C Wainwright is prevented from doing so: We have retained H.C. Wainwright & Co., LLC to act as our exclusive placement agent (“placement agent”) in connection with the shares of common stock offered by this prospectus supplement. The placement agent has agreed to use its reasonable best efforts to arrange for the sale of the common stock offered by this prospectus supplement. The placement agent is not purchasing or selling any of the shares of common stock we are offering and the placement agent is not required to arrange the purchase or sale of any specific number of shares or dollar amount. We have agreed to pay to the placement agent the placement agent fees set forth in the table below, which assumes that we sell all of the common stock offered by this prospectus supplement. All sales will be evidenced by separate securities purchase agreements between us and the investors. See “Plan of Distribution” on page S-8 of this prospectus supplement for more information regarding these arrangements.
Source: investors.mannkindcorp.com/secfiling.cfm?filingID=1193125-17-307995&CIK=899460 |
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Post by digger on Jan 12, 2018 18:13:05 GMT -5
"The scenario you just presented couldn't apply in the case of MannKind because H.C Wainwright is prevented from doing so...The placement agent is not purchasing or selling any of the shares of common stock we are offering and the placement agent is not required to arrange the purchase or sale of any specific number of shares or dollar amount.
"
That doesn't mean the placement agent is restricted from arranging deals for others. Indeed, to facilitate placement, wouldn't it be in the interest of the agent to arrange at least some sort "protection against loss" for large block buyers? Selling a large block of stock to an institution only to have it collapse is probably not the best way to attract future clients.
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Post by traderdennis on Jan 12, 2018 19:02:08 GMT -5
That is precisely how most PIPE transactions are executed. The bankers get a package of securities price to sell, typically based on Monday's market close. The selling team at the bank hits the phones first thing Tuesday morning to find buyers for the securities at the discounted price offered. Once an individual buyer has committed to participate in the deal, they can short the stock without it being considered a naked short because at that moment they have a bona fide economic exposure to the underlying stock. Contracts are confirmed and funds are wired on Wednesday, and the money is release to the company and the shares to the investors either late Wednesday or Thursday. This is frequently called an "overnight close" even though it actually takes 2-3 days. If the PIPE investors sold short well above $6, that is free money because they can cover the short with the newly delivered shares. They make the difference between the short price and the deal price in a period of about 48 hours with minimal risk (the only risk is that the company does not deliver the shares; I cannot a recall an example of that happening for a NASDAQ stock). Not all PIPES are shorted in this way, but many are, and especially so for certain banks such as Rodman & Renshaw, and Wainwright. Follow the market for a while and you will know which investment banks specialize in funding PIPES in this manner. A good place to start is to see which companies present at the Rodman & Renshaw conference in late September or early October; they are there for a reason. Don't take my word for it; research companies that have done large PIPES and you can normally see an up-tick in volume a day or two before the deals are announced. If you see increasing volume with decreasing price for no obvious reason don't be surprised to see a financing announced a few days later. The problem with many PIPE investors is that they don't care about the company, its industry, its business, or its strategy. They want to make a quick 10% profit for doing the deal, which is relatively simple to accomplish, and they have their money back almost immediately so they can do multiple PIPES with the same capital. Sure, 10% is a small return relative to the potential, but most investors will take a guaranteed 10% for tying up their money for about a week. If they can participate in 10 such deals a year, they are looking at close to 100% return on that part of their portfolio. In many cases the investor gets warrants as well as a discount, and those can be held for future gain. Who gets the deals? Only those big investors that can be relied on to participate in any deal the investment bank presents, and some of the discount is to compensate favorite customers for IPO or secondary offerings that did not work out. A PIPE placed off an S-3 shelf registration is not bullish the way a true underwritten secondary offering is. Both are secondary offerings but the investor quality is quite different. Like Spencer says, Wall Street can be a brutal place. He is entirely right on that point. The scenario you just presented couldn't apply in the case of MannKind because H.C Wainwright is prevented from doing so: We have retained H.C. Wainwright & Co., LLC to act as our exclusive placement agent (“placement agent”) in connection with the shares of common stock offered by this prospectus supplement. The placement agent has agreed to use its reasonable best efforts to arrange for the sale of the common stock offered by this prospectus supplement. The placement agent is not purchasing or selling any of the shares of common stock we are offering and the placement agent is not required to arrange the purchase or sale of any specific number of shares or dollar amount. We have agreed to pay to the placement agent the placement agent fees set forth in the table below, which assumes that we sell all of the common stock offered by this prospectus supplement. All sales will be evidenced by separate securities purchase agreements between us and the investors. See “Plan of Distribution” on page S-8 of this prospectus supplement for more information regarding these arrangements.
Source: investors.mannkindcorp.com/secfiling.cfm?filingID=1193125-17-307995&CIK=899460My guess is Deerfield took at 10 Million shares. No need to make calls |
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