% | $
Quotes you view appear here for quick access.

MannKind Corp. Message Board

  • about_that_stock about_that_stock Aug 16, 2013 12:21 PM Flag

    Options and Arbitrage Explained on MNKD

    Options expiration week and Deerfield related Arbitrage hit MNKD stock hard at the end of the week.
    Just received earlier this morning from a news letter. This service (no charge) has an excellent track record. Below is what they say today. I tend to agree but before receiving this, took half off. Will add back at 6.00 if it get's there, if not will just chase it next week.
    Sometimes for the average investor, a big drop from 8.10 to 6.03 over 48 hours makes no sense so they sell in a panic, they dont buy more, and margin calls and stop losses all trigger, adding more selling to a pile of sellers tripping over themselves to get out of MNKD.

    We just added at 6.24 and we are going to tell you why

    Deerfield is a well respected firm that is helping Mannkind to negotiate potential partnerships amongst other relationships and they have a vested interest in the success. At StockReversals we expect MNKD to have no problem getting a partner, its more going to be a fight over who offers the best terms and that may take a bit of time.

    That said, Deerfield has some convertible securities they can convert into stock if they wish after 11 trading days following this positive phase 3 data, which is August 28th.

    In order for that math to work for them, they need the stock at $6.67 or lower, its a long story but its 40 million worth of equity for them at that conversion point where they make out on entry.

    So between the arbitrage of the stock being shorted and the options expiration and everything else mentioned above, its creating an NQ like opportunity to buy some cheap stock if your patient.

    No guarantees... but its what we do

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • ound this from the press release.

      Under the terms of the financing, Deerfield committed to provide up to four tranches of $40 million each on the following schedule: at closing; following the release of certain results in MannKind’s two current Phase 3 clinical studies of Afrezza®; concurrently with repayment of MannKind’s 3.75% Senior Convertible Notes due 2013; and following FDA approval of Afrezza. The notes will accrue interest at a rate of 9.75% per annum until maturity in 2019. A portion of the principal amount of the loan facility may be convertible into shares of MannKind’s common stock at the Deerfield’s option after a specified period following the release of data from the aforementioned clinical trials. The conversion price will be determined by the volume weighted average price of the common stock during the 20 trading days immediately preceding the conversion date. If the conversion price exceeds $6.67, no more than 6 million shares may be issued upon conversion; if the conversion price is less than $3.33, no more than 12 million shares may be issued upon conversion; and if the conversion price is between these dollar amounts, no more than $40 million worth of common stock may be issued upon conversion. As part of the transaction, Deerfield received from MannKind milestone rights that provide for the payment of up to $90 million upon the occurrence of certain strategic and sales milestones.

    • It's not Deerfield, but rather Greenhill that is negotiating potential partnerships.

    • Pardon my ignorance, but what is an NQ like opportunity?

      Sentiment: Strong Buy

2.19-0.01(-0.45%)Nov 25 3:59 PMEST