What happened

MannKind Corp. (NASDAQ: MNKD) is having yet another bad day today, with its stock falling 19% as of 11:30 a.m. EST on Friday. The stock's double-digit plunge was sparked by a 1-for-5 reverse split that went into effect at 5:01 p.m. EST yesterday. 

Man appearing to be shocked at something on a laptop.

Image source: Getty Images.

So what

Last September, MannKind received a notice of delisting from the Nasdaq as a result of its share price sinking below the minimum closing bid price of at least $1.00 per share for 30 consecutive business days. With the 180 business day reprieve about to expire and the company failing to boost its share price in the interim, this reverse split was arguably the only viable route for MannKind to pursue in order remain on the Nasdaq. 

Now what

Even after this 1-for-5 reverse split, though, MannKind's stock is still in extremely dangerous territory. With a share price that's hovering around $1.98 at the time of writing, and the company desperately needing to tap the public markets to shore up its tenuous cash position, there's little reason to believe that MannKind's shares won't eventually dip below the $1 minimum threshold yet again. 

Bottom line: If MannKind's inhaled insulin product Afrezza doesn't start finding a profitable niche almost immediately, the company will almost certainly be bankrupt within perhaps a year based on its current burn rate. And as Afrezza's tepid sales haven't exactly improved since its relaunch under MannKind's stewardship, investors should probably brace themselves for the worst at this point.