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Post by matt on Dec 6, 2017 8:59:11 GMT -5
I am not sure what the status is at the moment, but I recall reading that the Senate version of the tax bill changes the rules for recognition of gains and losses on securities held for investment. At present you can identify particular share certificates, particular share lots, LIFO, FIFO, or the average cost method. The proposed rule makes FIFO mandatory for both gains and losses. If you have large unrealized gains or losses you might want to crank through the math to see how the law change would apply to you if you don't take action before December 31. The proposed law retains the 30-day wash sale rule so be aware of that as well.
Note that this was proposed law in one version of the tax bill, but I believe this change made it into the final version. If you have many layers of investments at many different price points, you might want to do a bit more homework, and do so very soon as Congress has a nasty habit of making committee modifications retroactive to the effective date (i.e. the date the bill is signed or is referred to the president for signature). In other words, you may have just a few days to act instead of until December 31.
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Post by matt on Dec 5, 2017 8:49:14 GMT -5
Based on historical data of MNKD and other companies, when is the share price impacted most when new shares are authorized? Once they are successfully voted for or once they're actually issued? I suppose it's highly dependent on the each unique situation. You are correct that it depends on the situation, but normally there is less impact when the shares are simply authorized unless the financial situation is already desperate. Many companies, including some very big ones, routinely have 50% or more of their outstanding shares in authorized but unissued shares, and in such cases it hardly raises an eyebrow especially since the shares tend to be used as acquisition currency and not necessarily to raise funds. In MNKD's case they will need to raise funds in 2018, most likely (although not certainly) via a secondary offering. The impact on share price is dependent on the terms of the secondary offering. As you can imagine, a secondary offering at a 10% discount to the market price would have a modest impact while a 30% discount plus warrant coverage would have a major impact. Since secondary offerings are not priced until the day or two before the money is raised, and market sentiment on this stock wanders all over the place, trying to guess the future share price is best left to Miss Cleo. About the best a shareholder can do is to follow the cash balance to predict when a raise might be necessary, and estimate what that might cost based on recent company performance, before deciding whether to remain a holder. Some people do well by exiting to cash just before financings and then reloading later, but your timing has to be exceptionally good to play that game.
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Post by matt on Dec 1, 2017 11:19:34 GMT -5
Deerfield? Short Mannkind, take the stock which will automatically drive the price down (dilution), close the short position and cash out. Rinse , repeat. The shares are easy money. ^^^ This. So long as Deerfield shorts immediately after entering into a revised contract with MNKD, and at a price above the conversion price, they win. For example, if they shorted when the stock was at $3.35 with an agreed conversion option at $3.25, they can't lose. If the stock goes to $4.00 in January, DF can convert the debt payment to shares and deliver the shares to close out the short, still making ten cents profit ($3.35-$3.25) minus some carrying costs. If the stock is trading at $2.75 in January, they can buy some shares for cash and deliver those shares to close the short, enjoying about sixty cents profit ($3.35-$2.75 less carrying costs). So long as their carrying costs on the short position are not more than the difference between the agreed conversion price and the short contract, it is a no lose situation for Deerfield making it a perfect hedge of their debt exposure.
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Post by matt on Nov 30, 2017 9:20:39 GMT -5
The first rule of securities law is that anything that can be summarized in a few lines is not the full text of the rule. Here you quoted the definition of a threshold security without citing the specific rules that apply to threshold securities. You can read the full text of Section 203 at this link: www.law.cornell.edu/cfr/text/17/242.203 (drink plenty of coffee before you start). Just scanning the rules briefly, they do not apply to individual securities and individual investors, but rather to individual brokers and participants of registered clearing agencies. The regulations say what brokers can and cannot do, but they do not say what the entire financial services industry can and cannot do. If there are a number of individuals brokers with large FTD positions, that does not affect any other broker that does not have such a FTD position. You cannot simply add up the FTD position of all brokers and determine what is permitted since the rules do not apply to the aggregate data. If you think about it, it is reasonable for the SEC to tell individual brokers what they can and cannot do, but how are unrelated brokers supposed to know the short and long position of every other participant in the US financial markets? The answer is, they can't. It is easy for a broker to program rules into their trading platforms to keep that brokerage in compliance, but they would need real time visibility to every other broker's trading systems to police the entire financial system. Likewise, there are many exceptions listed in the regulations that provide brokers and market makers exceptions to the basic rules. Read through the link I provided, and all cross-referenced sections, and you will see that there are enough holes sufficiently large to account for the data discrepancies you identified.
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Post by matt on Nov 29, 2017 9:06:04 GMT -5
Hey, Holdem, if you're an insider with a planned buy (or sell) schedule, I don't think it matters what you know, at least that's the way I thought it worked. I believe it does matter what you know prior to filing the planned buy. Per the SEC website on insider trading: The rule permits persons to trade in certain specified circumstances where it is clear that the information they are aware of is not a factor in the decision to trade, such as pursuant to a pre-existing plan, contract, or instruction that was made in good faith.Planned buys and sells are a little bit misleading. Originally they were designed to avoid trapping executives at large companies with a perpetual black out date. I formerly worked for a large healthcare concern that had so many earnings announcements, mergers and divestitures, and other material events in one year there were only six days a year when management could execute a trade. EVERYBODY traded on the same day which freaked out the shareholders when all the Form 4s got filed at once. There was nothing fishy going on, it was simply a need for some executive to get into cash to cover college expenses and other major commitments. What they don't tell you about planned sales is that they can be cancelled with no penalty. I can schedule a sale of 100,000 executive option shares for September next year, but if I learn new information in August that will make those shares a lot more valuable then I can change my mind and cancel the scheduled sale without penalty (it works a similar way on planned purchases). Technically, you should not queue up a planned sale while in possession of material non-public information but you can cancel orders with no repercussion, turning it all into a heads I win and tails you lose proposition especially in small companies with infrequent binary events.
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Post by matt on Nov 29, 2017 8:53:14 GMT -5
wondering how can a Pillow Company afford so much air time and Mannkind has not a one. That is because consumer products heavily advertised on TV do not pay for air time. The TV station gets a split of the revenue from the advertiser when a product is sold and nothing if the product does not sell. The 800 numbers and offer numbers you see on the screen at the end of the commercial are different for each station so that the advertiser can keep track of which airing generated the revenue. Drugs is a different business; revenue splitting based on consumption for any prescription product reimbursed by Medicare or private insurance is a violation of The Stark Act and similar state laws, and will land the manufacturer in some very hot water, incur some huge fines, and potentially land the executives in jail. I can only imagine the number of drug ads if this was not the case.
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Post by matt on Nov 28, 2017 9:04:47 GMT -5
Mannkind 2.0 relaunch has been going on long enough refills should be much better. Yes the Titration Kits extend refills. Yes many patients didn’t titrate. Yes insurance coverage sucks. However there are a scary amount of patients that try Afrezza and just don’t like it. Another confounding factor is the new packaging. As MNKD phases out certain product options and phases in new package sizes, the patients will be unable to obtain refills for the old product codes. This is not a big deal as the physician can just write a new script for the new product options, but it does artificially increase the number of new scripts and decrease the number of refills until the switch over to the new product packaging is complete. That said, there is no denying that if refill rates need some major improvement.
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Post by matt on Nov 27, 2017 11:45:56 GMT -5
It possible with the Mann Group selling out over 13M shares (http://investors.mannkindcorp.com/ownership-profile.cfm) they may have given shorts even more opportunity to bring the SP down. That could explain the sharp drop from the $6 range. Mann group may be continuing to sell out just as they did with $EYES - we won't know until they have to file again. The proxy statement contains ownership by the Mann entities as of the proxy date. While the company is primarily responsible only to report amounts that have been reported on Form 13, most companies also cross-check the figures with their transfer agent. Assuming the Mann entities hold shares in registered form and not street name, the entities still held title to those shares as of November 17. However, like any holder the Mann entities could loan shares, buy puts, or engage in other actions that would tend to project their value at the risk of reducing the market price, none of which shows up in any SEC disclosure, now or later.
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Post by matt on Nov 19, 2017 14:49:07 GMT -5
They have 8.8M shares, so they sold 13.3M shares. From the filing, As of the date of this proxy statement, the Company was not aware of any beneficial owner of more than five percent of its common stock other than The Mann Group LLC and The Alfred E. Mann Living Trust. The Mann Group, 7.4% of the Company or 8.6 million shares, The Alfred Mann Living Trust, 7.5% of the Company or 8.8 million shares I believe I am reading this right. I'm voting yes in 3 different accounts, but this does add up to just over 17 million, right ?? Yes, and no. 8.6+8.8 > 17 million so there is nothing wrong with your math skills. However, the way the SEC requires the numbers to be published results in a double count so the real number is just 8.8. The way it works is that if an entity owns shares, it must report them, and if an entity had the ability to vote or otherwise control shares they don't own, they have to report those as well. Since the AM Trust is the managing member of the Mann Group they have to report their control position even though the Mann Group themselves has already reported the shares. Note the footnote disclosure: "(2) Includes (i) the shares held by The Mann Group and (ii) 184,558 shares held of record by the Trust." If there are enough entities with linked control provisions, a single controlling shareholder can be required to report that they control more than 100% of all shares via the attribution rules. SEC reporting does not always makes sense.
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Post by matt on Nov 15, 2017 13:29:44 GMT -5
What he is saying, in essence, is that the higher price of Afrezza combined with a non-inferiority label means that insurance is not going to pay the premium for Afrezza in the absence of some hard economic evidence that it reduces the side effects of diabetes so long as lispro is cheaper.
Would insurance pay more if the benefits are proven? Almost certainly they would because the cost of treating an amputee are very high indeed, and once a patient loses a leg they become increasingly sedentary which leads to more expensive cardiovascular complications. Step one is proving that Afrezza can prevent the co-morbidities, but that is a long and expensive study. However, it may be one that needs to be done.
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Post by matt on Nov 14, 2017 13:05:01 GMT -5
The previous answer is correct. Once authorized, the shares can be issued at any time in such quantities and at such price as determined by the board. There is a NASDAQ marketplace rule that prevents more than 20% of the shares being issued at a discount during any six month period without explicit shareholder approval which somewhat limits issuances so long as the company trades on NASDAQ. ATM shares are sold at market, not at a discount, so those are limited only by the agreement with the underwriter (which is subject to amendment). This a blank check I am not willing to give. That is your choice of course, but consider that all such decisions are a trade-off between preventing dilution on terms you think are unacceptable and managements ability to pursue the strategies it has clearly articulated. Very little happens in this industry that does not cost money, and lots of it, and deep-pocketed partners are not exactly lined up outside the corporate offices; I am sure that tree has been shaken quite thoroughly at this point. Given that the alternative to passing the resolution is authorization of zero new shares, think carefully before you vote no.
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Post by matt on Nov 14, 2017 9:07:45 GMT -5
Deerfield is structured as a debt fund, and for them it is all about maximizing the return on that debt, so protecting their principal is entirely consistent with this report. They do structure the debt so that if the company is very successful they can pick up some extra money, but they have a fiduciary obligation to their investors to minimize losses to the bond fund.
Most of you reading this like to invest in stock and watch the price go up, but don't assume their investment objectives or their fund clientele have the same goals as you. You can make maximum money in the stock market by investing in high-risk, small cap equities or by trading in and out if you have the timing right, but then there are the "widows and orphans" types that want lower-risk investments that protect their principal and have a nearly guaranteed return. Bond funds work well for them.
When you see a bond fund like Deerfield buying shares, you can be fairly certain that they shorted them already to lock in the profit and will soon sell the shares to cover the short. Similarly, most of the "investors" in the recent placement at $6 likely shorted the instant they signed the subscription agreement and used the newly issued shares to cover. Those investors were happy to sell short at $6.50 and cover a few days later with $6 shares. While it may not sound like much, a 50 cent profit on a $6 investment is an 8.3% return in about a week. If the investor can repeat that with 20 other discounted PIPE transactions over the course of a year, that yields a portfolio return approaching 200% without any holding risk.
Deerfield gets much the same deal whenever they can swap debt principal for discounted shares. They don't need to hold the shares to win big on the increase in portfolio returns. Unless you know how James Flynn's compensation package is structured, you can't know what motivates his actions.
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Post by matt on Nov 13, 2017 15:24:45 GMT -5
Before I vote yes, I'd like to know how many shares will be issued and at what discount. The previous answer is correct. Once authorized, the shares can be issued at any time in such quantities and at such price as determined by the board. There is a NASDAQ marketplace rule that prevents more than 20% of the shares being issued at a discount during any six month period without explicit shareholder approval which somewhat limits issuances so long as the company trades on NASDAQ. ATM shares are sold at market, not at a discount, so those are limited only by the agreement with the underwriter (which is subject to amendment).
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Post by matt on Nov 13, 2017 10:57:11 GMT -5
A good reasons for doubling the shares is the legal hurdles that have to be dealt with to get approval. Delaware requires an absolute majority of the shares issued and outstanding to increase the number of authorized shares or for certain other actions (like a reverse split), but only board action for others (such as forward splits). Because many shareholders don't read the proxy carefully, they simply don't bother to vote which is essentially the same as a no vote given the way the votes have to be counted, although this is less likely if the Mann Group shares vote yes. Still, if the vote does not pass on the first try they will adjourn the meeting and hire a proxy solicitor until the company has gathered enough yes votes to proceed. That is both time consuming and expensive so a lot of corporate lawyers advise to have far more shares available than what is really required. The mood is fairly upbeat at the moment, so this is a good time to do it.
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Post by matt on Nov 10, 2017 15:01:55 GMT -5
A couple of years ago a form from Mannkind was filed but it was classified as "private." I do not know why the government would allow the doc not to be made public. I remember the document would be private for a couple of years. I would love to know why "private" for a couple of years? Does anyone remember this situation and what year this document would be made public? Confidential treatment orders are common and the SEC permits them otherwise competitors would have full visibility to important documents. However, when a CTO is issued it is generally limited to specific terms and conditions so the contracts read like this: Licensee will pay licensor a royalty equal to XX% of sales so long as cumulative sales are less than $XXXXXXX, and a royalty of XX% of sales once cumulative sales exceed $XXXX The general existence of the contract, who the parties are, or the subject matter are public record but the specific economic terms are obscured. Normally a CTO applies for five years, but the period can be extended.
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