You guys have been helpful answering the odd thing on the medical side, I am a finance guy so hopefully this helps you since it seems warrants are the preferred choice, which is frankly a poor strategy:
Lets assume the following; we have 10,000 to invest and warrants/options are trading at par for $1 which they have been hovering around for several days.
Warrants give you 10,000 executable warrants at .6 of a share and a strike price of 2.60, which is 6000 shares total. Break even point is thus, $3.60
Options give you 100 (options are in lots of 100), at a strike price of $5 which equates to 10,000 shares total. Break even point is thus, $6(option expires 2015, one year less than the warrants)
Lets say MNKD trades at $10. Profit of warrants =
($10 share price - 3.60 break even point)X6000 shares total =
$38,400
Profit of options = ($10 share price - $6 break even)X10,000 shares total =
$40,000
The options have already won out and the share price is only at $10. This relationship is exponential in nature. Watch at $50 share price
Warrants profit = $278,400
Options = $440,000
The only thing the warrants give us is time the additional time value of about 1 year. If MNKD has not yeilding PDUFA approval and have a partner before the 2015 options expires, the company would be dead in the water, so who cares about the additional time value granted by the warrants. Also anyone who excercises any option prior to the expiry is doing themselves a large disservice.
Cheers
