Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why MannKind Corporation Stock Is Sinking Today

By George Budwell - Mar 3, 2017 at 11:39AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The biopharma's reverse split isn't a hit with investors.

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.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

MannKind Corporation Stock Quote
MannKind Corporation
MNKD

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
665%
 
S&P 500 Returns
142%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.