Chris Lau
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Chris Lau in Value Stocks,

MannKind is for Bagholders

After twice reaching the $2 level in the last two months, MannKind (MNKD) proceeded to fall. The overall direction is still down. What will it take to reverse the bearish theme and to squeeze out the short-sellers? Short float stood at 37.63%.

Analysts are now negative on MNKD. Target prices range from $0.05 (Piper Jafray) to $0.15 (RBC Capital Markets). This is a downward revision from the $1.50 and $1.00 price target, respectively. Last year, analysts set price lofty price targets in the $10 range.

At its conference call a week ago, MNKD said it may sell up to $50 million in common shares. The company doesn’t have much cash on hand ($0.13 per share), so the best case scenario for MNKD is maintaining access to credit, raising money from capital markets, and minimizing losses as it attempts to launch its core product, Afrezza.

This is a dangerous stock. Trade the bounce but do not be a bag holder.