"Help me understand. Is it safe to assume you would see us hitting $1.50 due to dilutive financing? Or is there some other reason you postulate?:
Here's the whole sentence, OPC, "If MNKD is below $1.50, you may get "put" but most likely that won't happen till January 2014." I fully admit that sentence is subject to at least two interpretaions, given my use of the impreciset "that."
What "that" refers to is the time at which the stock may be put to you - theoretically, you could be put the stock anytime, but almost certainly only when the price of the stock is below $1.50. Beyond that, it is also almost always the case that the holder of the right to put the stock to you will trade that put, rather than exercising it, right up until the expirty date.
As far as whether I see the stock hitting $1.50 - I don't know, it certainly could, but my thought in going for the $1.50's is to give me some decent cushion, in case it does go that low.
Your further point about reconciling that strategy with what you heard - well, I don't place a huge amount of store in what I hear (I'll hear it for myself this evening) about financing, based on what's happened in the past. Their intentions are excellent, their ability to see those intentions through, far less so.
What I think, since some dilution is already priced in, is that most will understand that MNKD shares could represent "dead" money for many months, and impatient people and of course, speculator people, well they will likely put downward pressure on the stock from, first, selling, and second, by not being in part of those interesting in buying the stock anytime soon.
I've got more than enough warrants, so I'm covered if by any means, MNKD is successful. So, as long as the premiums on puts and calls are generous, I'm going to try to use my knowledge of the company and the timing of events that might move the stock materially, to my advantage in selling naked puts and calls (the calls are theoretically covered by my warrants, so if the stock takes off, I don't lose, I just profit less. That's okay, as this is a risky business!
