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Post by awesomo on Jul 10, 2018 9:03:52 GMT -5
No unusual volume yet half an hour in, continued downward pressure though.
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Post by matt on Jul 10, 2018 9:41:29 GMT -5
I could be totally wrong but . . . having done my share of PIPE transactions, when the sales desk at the investment bank starts making phone calls to find buyers the news can leak out that a transaction is coming. Anybody the sales desk contacts is supposedly under a confidentiality agreement not to trade on the information, but we all know that some investors have a habit of leaking information. Depending on the size of the raise, the bankers usually cannot finalize the offering until late in the morning or early afternoon at the soonest, at which point the real buyers will seek to lock in their gains on the discount offered. The volume won't move in a big way until after that happens.
For those that are not familiar with the process, most PIPEs are sold using a Dutch auction method. Each investor contacted will offer to buy a certain number of shares at a certain price and when all the offers are in they will be ranked highest price to lowest price. Those bidding the highest will get filled, then the second highest, and so on until the target amount is reached. Everybody who makes an accepted bid gets the lowest successful price.
Example: Investor A offers $1.60 for 1 million shares, Investor B $1.58 offers for 2 million shares, Investor C offers $1.55 for 2 million shares, Investor D offers $1.54 for 2 million shares. If the total raise is for 4 million shares then A and B get filled 100%, C gets the remaining 1 million shares, and D gets nothing. Everybody pays $1.55 so the raise is 4 million X $1.55 = $6.2 million less fees.
Note about my earlier comment, most PIPEs price on Tuesday but some not until Wednesday. Sometimes the bids are lower than desired and the company takes less money than they had hoped, and the back and forth can take some time while management and the board decide if they are going to reduce the size of the deal. Similarly, sometimes the company wants a friendly investment fund in the mix but that fund has bid too low so a little bit of the hard sell is required and that can delay the process. The goal on these "overnight closings" is to have everything done by the end of the week, and the usual pattern is pricing on Tuesday, contracts countersigned and funds wired to escrow on Wednesday, public announcement late Wednesday or Thursday, and funds available to the company / shares issued by Friday or Monday. However, a lot of things can happen that will move the time line a day or two, and it is pure speculation that this is the week they will choose to do the raise. It could just as easily be next week so there are no guarantees on any of this.
As long as volume remains at or below the average daily volume, it is likely nothing has been finalized. When the volume starts to spike, that is usually an indication that the successful bidders have been notified, have signed their subscription agreements, and have started to hedge their investment. It is not a perfectly reliable indicator, but it is better than most.
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Post by gareaudan on Jul 10, 2018 9:45:27 GMT -5
I could be totally wrong but . . . having done my share of PIPE transactions, when the sales desk at the investment bank starts making phone calls to find buyers the news can leak out that a transaction is coming. Anybody the sales desk contacts is supposedly under a confidentiality agreement not to trade on the information, but we all know that some investors have a habit of leaking information. Depending on the size of the raise, the bankers usually cannot finalize the offering until late in the morning or early afternoon at the soonest, at which point the real buyers will seek to lock in their gains on the discount offered. The volume won't move in a big way until after that happens. For those that are not familiar with the process, most PIPEs are sold using a Dutch auction method. Each investor contacted will offer to buy a certain number of shares at a certain price and when all the offers are in they will be ranked highest price to lowest price. Those bidding the highest will get filled, then the second highest, and so on until the target amount is reached. Everybody who makes an accepted bid gets the lowest successful price. Example: Investor A offers $1.60 for 1 million shares, Investor B $1.58 offers for 2 million shares, Investor C offers $1.55 for 2 million shares, Investor D offers $1.54 for 2 million shares. If the total raise is for 4 million shares then A and B get filled 100%, C gets the remaining 1 million shares, and D gets nothing. Everybody pays $1.55 so the raise is 4 million X $1.55 = $6.2 million less fees. Note about my earlier comment, most PIPEs price on Tuesday but some not until Wednesday. Sometimes the bids are lower than desired and the company takes less money than they had hoped, and the back and forth can take some time while management and the board decide if they are going to reduce the size of the deal. Similarly, sometimes the company wants a friendly investment fund in the mix but that fund has bid too low so a little bit of the hard sell is required and that can delay the process. The goal on these "overnight closings" is to have everything done by the end of the week, and the usual pattern is pricing on Tuesday, contracts countersigned and funds wired to escrow on Wednesday, public announcement late Wednesday or Thursday, and funds available to the company / shares issued by Friday or Monday. However, a lot of things can happen that will move the time line a day or two, and it is pure speculation that this is the week they will choose to do the raise. It could just as easily be next week so there are no guarantees on any of this. As long as volume remains at or below the average daily volume, it is likely nothing has been finalized. When the volume starts to spike, that is usually an indication that the successful bidders have been notified, have signed their subscription agreements, and have started to hedge their investment. It is not a perfectly reliable indicator, but it is better than most. thanks Matt, very useful! |
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Post by cretin11 on Jul 10, 2018 15:24:25 GMT -5
Sounds great, but I'm curious what's your basis for thinking that? Why not? This dream is as real as any others. Indeed. Hopefully not just a PIPE dream. |
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Post by awesomo on Jul 10, 2018 15:29:16 GMT -5
At this point, just get the PIPE over with. Every day is more share price hemorrhaging.
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Post by brotherm1 on Jul 10, 2018 15:49:43 GMT -5
I could be totally wrong but . . . having done my share of PIPE transactions, when the sales desk at the investment bank starts making phone calls to find buyers the news can leak out that a transaction is coming. Anybody the sales desk contacts is supposedly under a confidentiality agreement not to trade on the information, but we all know that some investors have a habit of leaking information. Depending on the size of the raise, the bankers usually cannot finalize the offering until late in the morning or early afternoon at the soonest, at which point the real buyers will seek to lock in their gains on the discount offered. The volume won't move in a big way until after that happens. For those that are not familiar with the process, most PIPEs are sold using a Dutch auction method. Each investor contacted will offer to buy a certain number of shares at a certain price and when all the offers are in they will be ranked highest price to lowest price. Those bidding the highest will get filled, then the second highest, and so on until the target amount is reached. Everybody who makes an accepted bid gets the lowest successful price. Example: Investor A offers $1.60 for 1 million shares, Investor B $1.58 offers for 2 million shares, Investor C offers $1.55 for 2 million shares, Investor D offers $1.54 for 2 million shares. If the total raise is for 4 million shares then A and B get filled 100%, C gets the remaining 1 million shares, and D gets nothing. Everybody pays $1.55 so the raise is 4 million X $1.55 = $6.2 million less fees. Note about my earlier comment, most PIPEs price on Tuesday but some not until Wednesday. Sometimes the bids are lower than desired and the company takes less money than they had hoped, and the back and forth can take some time while management and the board decide if they are going to reduce the size of the deal. Similarly, sometimes the company wants a friendly investment fund in the mix but that fund has bid too low so a little bit of the hard sell is required and that can delay the process. The goal on these "overnight closings" is to have everything done by the end of the week, and the usual pattern is pricing on Tuesday, contracts countersigned and funds wired to escrow on Wednesday, public announcement late Wednesday or Thursday, and funds available to the company / shares issued by Friday or Monday. However, a lot of things can happen that will move the time line a day or two, and it is pure speculation that this is the week they will choose to do the raise. It could just as easily be next week so there are no guarantees on any of this. As long as volume remains at or below the average daily volume, it is likely nothing has been finalized. When the volume starts to spike, that is usually an indication that the successful bidders have been notified, have signed their subscription agreements, and have started to hedge their investment. It is not a perfectly reliable indicator, but it is better than most. So if this PIPE transaction is currently taking place now, is it likely that the bank and real buyers have already shorted the stock at a higher price and they will be using the purchased shares to cover at a lower price after the transaction has settled? |
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Post by traderdennis on Jul 10, 2018 15:58:27 GMT -5
I could be totally wrong but . . . having done my share of PIPE transactions, when the sales desk at the investment bank starts making phone calls to find buyers the news can leak out that a transaction is coming. Anybody the sales desk contacts is supposedly under a confidentiality agreement not to trade on the information, but we all know that some investors have a habit of leaking information. Depending on the size of the raise, the bankers usually cannot finalize the offering until late in the morning or early afternoon at the soonest, at which point the real buyers will seek to lock in their gains on the discount offered. The volume won't move in a big way until after that happens. For those that are not familiar with the process, most PIPEs are sold using a Dutch auction method. Each investor contacted will offer to buy a certain number of shares at a certain price and when all the offers are in they will be ranked highest price to lowest price. Those bidding the highest will get filled, then the second highest, and so on until the target amount is reached. Everybody who makes an accepted bid gets the lowest successful price. Example: Investor A offers $1.60 for 1 million shares, Investor B $1.58 offers for 2 million shares, Investor C offers $1.55 for 2 million shares, Investor D offers $1.54 for 2 million shares. If the total raise is for 4 million shares then A and B get filled 100%, C gets the remaining 1 million shares, and D gets nothing. Everybody pays $1.55 so the raise is 4 million X $1.55 = $6.2 million less fees. Note about my earlier comment, most PIPEs price on Tuesday but some not until Wednesday. Sometimes the bids are lower than desired and the company takes less money than they had hoped, and the back and forth can take some time while management and the board decide if they are going to reduce the size of the deal. Similarly, sometimes the company wants a friendly investment fund in the mix but that fund has bid too low so a little bit of the hard sell is required and that can delay the process. The goal on these "overnight closings" is to have everything done by the end of the week, and the usual pattern is pricing on Tuesday, contracts countersigned and funds wired to escrow on Wednesday, public announcement late Wednesday or Thursday, and funds available to the company / shares issued by Friday or Monday. However, a lot of things can happen that will move the time line a day or two, and it is pure speculation that this is the week they will choose to do the raise. It could just as easily be next week so there are no guarantees on any of this. As long as volume remains at or below the average daily volume, it is likely nothing has been finalized. When the volume starts to spike, that is usually an indication that the successful bidders have been notified, have signed their subscription agreements, and have started to hedge their investment. It is not a perfectly reliable indicator, but it is better than most. So if this PIPE transaction is currently taking place now, is it likely that the bank and real buyers have already shorted the stock at a higher price and they will be using the purchased shares to cover at a lower price after the transaction has settled? Yeah, my guess is that it is possible. On June 22nd, there was 21 Million shares traded and positions could of opened up. Deerfield can always take a legal short position against their debt as a hedge, Sabby can open a short position as a hedge to their 2.38 warrants. Price was above 1.87 so they would be ecstatic to cover below 1.70. We will find out pretty quickly if the short positions rose as it should be reported tomorrow??? In the last two weeks there has not been much volume so unless it happened on June 22, they would need to open new positions. |
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Post by peppy on Jul 10, 2018 19:28:04 GMT -5
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Post by mytakeonit on Jul 10, 2018 19:47:41 GMT -5
Waiting ... Waiting ... I am taking wet powder to Vegas next week. It should be dry powder when I return to trading on the 23rd.
Then ... let the party begin !!!
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Post by gareaudan on Jul 11, 2018 9:36:36 GMT -5
I could be totally wrong but . . . having done my share of PIPE transactions, when the sales desk at the investment bank starts making phone calls to find buyers the news can leak out that a transaction is coming. Anybody the sales desk contacts is supposedly under a confidentiality agreement not to trade on the information, but we all know that some investors have a habit of leaking information. Depending on the size of the raise, the bankers usually cannot finalize the offering until late in the morning or early afternoon at the soonest, at which point the real buyers will seek to lock in their gains on the discount offered. The volume won't move in a big way until after that happens. For those that are not familiar with the process, most PIPEs are sold using a Dutch auction method. Each investor contacted will offer to buy a certain number of shares at a certain price and when all the offers are in they will be ranked highest price to lowest price. Those bidding the highest will get filled, then the second highest, and so on until the target amount is reached. Everybody who makes an accepted bid gets the lowest successful price. Example: Investor A offers $1.60 for 1 million shares, Investor B $1.58 offers for 2 million shares, Investor C offers $1.55 for 2 million shares, Investor D offers $1.54 for 2 million shares. If the total raise is for 4 million shares then A and B get filled 100%, C gets the remaining 1 million shares, and D gets nothing. Everybody pays $1.55 so the raise is 4 million X $1.55 = $6.2 million less fees. Note about my earlier comment, most PIPEs price on Tuesday but some not until Wednesday. Sometimes the bids are lower than desired and the company takes less money than they had hoped, and the back and forth can take some time while management and the board decide if they are going to reduce the size of the deal. Similarly, sometimes the company wants a friendly investment fund in the mix but that fund has bid too low so a little bit of the hard sell is required and that can delay the process. The goal on these "overnight closings" is to have everything done by the end of the week, and the usual pattern is pricing on Tuesday, contracts countersigned and funds wired to escrow on Wednesday, public announcement late Wednesday or Thursday, and funds available to the company / shares issued by Friday or Monday. However, a lot of things can happen that will move the time line a day or two, and it is pure speculation that this is the week they will choose to do the raise. It could just as easily be next week so there are no guarantees on any of this. As long as volume remains at or below the average daily volume, it is likely nothing has been finalized. When the volume starts to spike, that is usually an indication that the successful bidders have been notified, have signed their subscription agreements, and have started to hedge their investment. It is not a perfectly reliable indicator, but it is better than most. very low volume today so i guess that nothing has been finalized, if a pipe transaction is taking place. Matt, you said that "most PIPEs price on Tuesday but some not until Wednesday" but is it possible to be price only on thursday or even friday? Thanks |
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Post by peppy on Jul 11, 2018 15:17:53 GMT -5
MNKD Nasdaq real time volume, 373,385 shares
MNKD Nasdaq summary volume, 545,890 shares
MNKD $1.70 unch. unch
This is the lowest volume I remember ever seeing.
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Post by gareaudan on Jul 11, 2018 15:21:24 GMT -5
MNKD Nasdaq real time volume, 373,385 shares MNKD Nasdaq summary volume, 545,890 shares MNKD $1.70 unch. unch This is the lowest volume I remember ever seeing. yeap me too, and a 27% increase in the reported short interest which seems big to me. |
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Post by mytakeonit on Jul 11, 2018 15:22:30 GMT -5
Saturday and Sundays volume was even lower.
The increase in shorted shares is making me drool. Ha!
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Post by gareaudan on Jul 11, 2018 15:31:45 GMT -5
Saturday and Sundays volume was even lower. The increase in shorted shares is making me drool. Ha! im not sure to understand why it is making you drool. If the one who shorted are the same that will buy from the pipe, their are going to cover immediately with thoses shares and the sp is going to stay at 1,70 no? Why is it a good thing to have an increase of the short interest now? |
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Post by traderdennis on Jul 11, 2018 15:57:57 GMT -5
Saturday and Sundays volume was even lower. The increase in shorted shares is making me drool. Ha! im not sure to understand why it is making you drool. If the one who shorted are the same that will buy from the pipe, their are going to cover immediately with thoses shares and the sp is going to stay at 1,70 no? Why is it a good thing to have an increase of the short interest now? Exactly, the next round of pipe funding those new short shares will be covered. In most cases mytake is hoping there is seismic event to make the shorts cover before the pipe and cause the mythical short squeeze. There was one in October 2017 that sent the share price to just under$7. The October rise was just some manipulation of the share price. |
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