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Post by babaoriley on Apr 8, 2018 13:43:08 GMT -5
LOL! It seems that you and baba are looking at different "maps". The scripts graphics and share price. Yup, those two charts laid on on another produce the old "X marks the spot."
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Post by agedhippie on Apr 8, 2018 13:44:00 GMT -5
I would expect all the investors (except Kent Kresa) to have shorted their shares near the top of the market. That day the price peaked at $6.96 and closed at $6.71 despite dipping to $5.72 with volume over 48 million. They got their shares at $6.00, shorted near the peak, and made out like bandits. The people who got caught that day were retail, or momentum traders who were not watching the market properly. Even more got caught on the way down as the position unwound because they couldn't believe it was just a spike and was over. If they could do that once (spike the share price) then why didn't they do it this time? There is a limit to how often you can pull that trick without getting the SEC all over you... aged, you're such a cynic. Why thank you! [bows to crowd]
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Post by dreamboatcruise on Apr 8, 2018 13:54:58 GMT -5
I wonder if the investors that purchased shares at $6 in the fall were offered and purchased shares this time from Wainwright to average down. I remember seeing that at least one law suit was filed against Wainwright consequent to the shares they purchased at $6. I would expect all the investors (except Kent Kresa) to have shorted their shares near the top of the market. That day the price peaked at $6.96 and closed at $6.71 despite dipping to $5.72 with volume over 48 million. They got their shares at $6.00, shorted near the peak, and made out like bandits. The people who got caught that day were retail, or momentum traders who were not watching the market properly. Even more got caught on the way down as the position unwound because they couldn't believe it was just a spike and was over. If they could do that once (spike the share price) then why didn't they do it this time? There is a limit to how often you can pull that trick without getting the SEC all over you... Aside from SEC, there's a limit to credibility about how great the label change will be and how insurance coverage is going to improve in January... especially when it's April. [Cynic in training, not yet ready for the stage]
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Post by cjm18 on Apr 8, 2018 21:51:33 GMT -5
Seems to me that they issued as many shares as they possibly could. I am eager to read where / why I am mistaken. The NASDAQ Marketplace Rules prohibit issuing more than 20% of the outstanding shares at a discount to the market price in any six month period. This is a perpetually moving target as each sale will affect the start of the six month period and the number of shares outstanding. I don't have the patience to do the math, but you can easily get there if you troll back through all the SEC filings. The numbers below are for example purposes only. Each discounted raise resets the calendar, in full or in part, which determines when the next raise can happen. Similarly, since the 20% limit is based on outstanding shares, not authorized shares, the more shares that get sold the larger the next raise can be. Imagine if a company does the maximum permissible discounted raise on January 1 and after the raise they have 100 shares. The rules allow a follow-on raise for 20% of the outstanding no earlier than July 1, but the outstanding shares after that raise will be 100 + 20 = 120. Similarly, the following January 1 the company can sell 24 more shares for a new total outstanding of 144. There is a built-in incentive to sell the maximum permissible as soon as possible after the six month waiting period is over as that sets the limits for the next raise even higher. To understand MNKD you need to build a spreadsheet with dates for every share issuance in the past six months, keep a running computation of the total outstanding, and know which sales were under the ATM (which is not discounted) and which were discounted (like Deerfield / Amphastar deals). With that data in hand it will be easy to see what the maximum number of shares issuable on any given date looks like. It’s my understanding that the recent deerfield conversion was not at a discount. Thus those shares don’t count towards the 20%. 20% of 126 million was the maximum and we used 14million. investors.mannkindcorp.com/news-releases/news-release-details/mannkind-restructures-797-million-debt-obligation-mann-group-andLastly, this cash gets us to the stat study results. Which is interesting.
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Post by digger on Apr 8, 2018 22:22:07 GMT -5
There sure seems to have been a big reaction to such a small anticipated offering. Small being relative as the decision was made to sell 14M of the 140M newly authorized shares to extend the runway for a brief period to buy some time. Next up, if Mike is correct, we'll see scripts rise and at least one partnership announcement. This should cause the pps to move up. Following this will be the release of the STAT study and hopefully a new and improved marketing push which should also increase the pps. We might then see another 14M offering at a price that should net significantly more than $23.5M. This in conjunction with increasing scripts and the resulting lower burn rate would buy more time plus boost further marketing. IMO Mike's plan is proceeding on track. He certainly doesn't want further dilution as it hurts him also. This should be a great time to buy...maybe even the last time to buy at such a low price. As Warren Buffett said, "Be greedy when others are fearful". GLTA If it's accurate, this comment by "daviscupper" on the yahoo message board might help explain why the reaction was so big: "The discount in the offering is a lot more than you think. For $2.00 the buyer gets one share of stock plus one warrant. The warrant is really just an option to buy a share of stock at a strike price of 2.38 six months out. If you examine future option tables between 2.00 and 2.50 strike prices and extrapolate between the prices and for time at six months out you realize these warrants are worth about .40-.45 per warrant. So let’s examine the deal again in equation form. 2.00 = one share + one warrant, Noting the warrant is worth at least 40 cents we rewrite the equation, 2.00 = one share + .40, now solving for the value of one share yields, 2.00-.40 = one share, 1.60 = one share. 1.60 is the effective price the buyer paid for the stock. That is quite a discount. (2.38-1.60)/2.38 = .3227, That is nearly a 33-percent discount. A third off the previous closing price. Nice deal if you can get it." I suspect one could argue the discount was even more since "daviscupper" is using an option priced six months out while the warrants don't expire for a year.
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Post by boca1girl on Apr 9, 2018 5:47:06 GMT -5
Digger - Do warrants trade on an exchange like options? Can warrants be sold from these buyers to another party?
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Post by agedhippie on Apr 9, 2018 8:42:01 GMT -5
Digger - Do warrants trade on an exchange like options? Can warrants be sold from these buyers to another party? I don't know exactly how this deal was set up, but typically the deal is for a unit that comprises a share, a warrant for a percentage of a share, and sometimes a right to a percentage of a right as well (that last bit is less common). I trade warrants a fair bit, mostly in the OTC market, and like them because they behave like long term options with the benefit that occasionally the issuer will buy you out for a premium. They are fairly illiquid so entering and exiting a position without moving the price can be tricky.
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Post by digger on Apr 9, 2018 9:34:13 GMT -5
Digger - Do warrants trade on an exchange like options? Can warrants be sold from these buyers to another party? I don't know if they will trade on any exchanges, but I presume whoever bought them would be allowed to sell them to an interested party if they could find one.
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Post by cjc04 on Apr 9, 2018 9:52:23 GMT -5
Does anyone have any thoughts on the 6-12 month window for the warrants?
Who would request that specific window and why? I can see MNKD wanting to close the window at 12 months if they believe the sp will be much higher beyond that, but why the 6 month wait to open the window?
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Post by mnkdfann on Apr 9, 2018 10:21:15 GMT -5
Does anyone have any thoughts on the 6-12 month window for the warrants? Who would request that specific window and why? I can see MNKD wanting to close the window at 12 months if they believe the sp will be much higher beyond that, but why the 6 month wait to open the window? Over at SA, someone mentioned that it may have had to do with avoiding more than 20% dilution in the current 6 month period.
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Post by cjc04 on Apr 9, 2018 10:25:55 GMT -5
Does anyone have any thoughts on the 6-12 month window for the warrants? Who would request that specific window and why? I can see MNKD wanting to close the window at 12 months if they believe the sp will be much higher beyond that, but why the 6 month wait to open the window? Over at SA, someone mentioned that it may have had to do with avoiding more than 20% dilution in the current 6 month period. that makes sense, thx.
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Post by sportsrancho on Apr 9, 2018 15:11:08 GMT -5
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Post by compound26 on Apr 9, 2018 16:13:34 GMT -5
This is not in defense of the management's decision to make a direct offer at $2 right now. However, I do not believe that the recent market action may have played a factor for the management's decision to pull the trigger to raise some money right now. By my estimate, Mannkind has about $25 million as of March 31, which means a runway until June 30. However, the market has been very volatile recently. So there is a risk that the market may shut down for Mannkind (i.e., in the sense that Mannkind's shares suddenly drops to below $1 again or the capital market just becomes in practice inaccessible for a while for small biotech companies). Additionally, Management will need to have some money in the bank to show to the sales representatives that they will still have salaries and bonus in the coming months. And the sale representatives will also need to have assurance that the company will have enough financial stability at least in the near future so that they will have more confidence to do their sales pitches to the doctors. So all in all, given the situation (both micro and macro) we are in, this capital raise, though not at ideal price, is acceptable to me. So Mike expressly confirmed in his (H C Wainwright Conference) presentation today that this recent capital raise indeed has much to do with the current status of the market and economy. Personally, I think this is prudently move. Granted, now probably is not the ideal time to raise money given there is no positive news accompanying the raise. However, given the current status of the market and economy, a capital raise of this size (14 millions shares and $26 million in proceeds) is a good insurance for the company to purchase so that they do not have to worry about capital raise or market conditions until sometime after ADA. The ADA exposure, plus the two international deals Mike mentioned, will likely present a good opportunity for the company to raise some additional funds at that point.
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Post by sportsrancho on Apr 9, 2018 16:20:13 GMT -5
This is not in defense of the management's decision to make a direct offer at $2 right now. However, I do not believe that the recent market action may have played a factor for the management's decision to pull the trigger to raise some money right now. By my estimate, Mannkind has about $25 million as of March 31, which means a runway until June 30. However, the market has been very volatile recently. So there is a risk that the market may shut down for Mannkind (i.e., in the sense that Mannkind's shares suddenly drops to below $1 again or the capital market just becomes in practice inaccessible for a while for small biotech companies). Additionally, Management will need to have some money in the bank to show to the sales representatives that they will still have salaries and bonus in the coming months. And the sale representatives will also need to have assurance that the company will have enough financial stability at least in the near future so that they will have more confidence to do their sales pitches to the doctors. So all in all, given the situation (both micro and macro) we are in, this capital raise, though not at ideal price, is acceptable to me. So Mike expressly confirmed in his (H C Wainwright Conference) presentation today that this recent capital raise indeed has much to do with the current status of the market and economy. Personally, I think this is prudently move. Granted, now probably is not the ideal time to raise money given there is no positive news accompanying the raise. However, given the current status of the market and economy, a capital raise of this size (14 millions shares and $26 million in proceeds) is a good insurance for the company to purchase so that they do not have to worry about capital raise or market conditions until sometime after ADA. The ADA exposure, plus the two international deals Mike mentioned, will likely present a good opportunity for the company to raise some additional funds at that point. Good call compound one of many! Congrats to Mike for getting ahead of the situation. I no longer worried that this company is going to do the wrong thing at the wrong time!
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Post by celo on Apr 9, 2018 16:32:07 GMT -5
So Mike expressly confirmed in his (H C Wainwright Conference) presentation today that this recent capital raise indeed has much to do with the current status of the market and economy. Personally, I think this is prudently move. Granted, now probably is not the ideal time to raise money given there is no positive news accompanying the raise. However, given the current status of the market and economy, a capital raise of this size (14 millions shares and $26 million in proceeds) is a good insurance for the company to purchase so that they do not have to worry about capital raise or market conditions until sometime after ADA. The ADA exposure, plus the two international deals Mike mentioned, will likely present a good opportunity for the company to raise some additional funds at that point. Good call compound one of many! Congrats to Mike for getting ahead of the situation. I no longer worried that this company is going to do the wrong thing at the wrong time! Or the news actually coming up isn't as good as it sounds. The money we will be getting form the deals is very minimal and the STAT study was actually marginal at best. So better raise money now before the market says meh and the stock continues to fall. Please, stop my mind from wondering.... Nah, that's not right. Great job in getting money before a recession hits.
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