If you missed Monday’s edition, you can check it out . Speaking of Monday's edition, we suggested re-entries into four previously suggested ideas that have done extremely well for us in the past, , , and . So far, is performing the best, and haven't done much yet either way, but came out with some news this morning that has technically busted our trade and has investors spooked. However, if you read between the lines, is it just an opportunity for large players to take advantage of cheap stock? The company announced plans to sell up to 140 million shares of stock. MannKind will use the funds to pay for new trials of its inhaled diabetes drug frezza and cancel more than $200 million in debt owed to its CEO. News that a company is selling a large amount of stock often weighs on shares, as existing shareholders worry that their individual holdings will be worth less with a bigger supply of stock on the market. MannKind had about 199 million shares outstanding as of ug. 6. MannKind said in September that it would sell up to $500 million in common and preferred stock, warrants, and debt securities as it seeks approval from the Food and Drug dministration for frezza. It's been trying to win approval for years, and expects to complete new studies of the drug and the inhaler that delivers it in 2013. The Valencia, Calif., company has no approved drugs. One offering consists of 40 million shares of restricted stock and warrants to buy 30 million more restricted shares to a group controlled by MannKind's CEO and biggest shareholder, lfred Mann. In return, The Mann Group LLC will cancel $224.6 million in debt MannKind owes it. lfred Mann is MannKind's largest shareholder by far, with a nearly 42 percent stake. So if investors knew this was coming, why are they so freaked out? That's a good question because if you really take a minute and think about it, the whole deal looks like a gypsy swap to me. They're retiring debt, but increasing dilution and their stake in the Company inadvertently through a group controlled by the CEO. This tells me one of two things and the two points I'll make couldn't be more polarizing in opposition. Either the Company is a flat out joke and they're just using as a money making machine to sell stock and make money, or these guys believe so much in the future of frezza that their initial stake in the Company just isn't enough and they want more. Since I'm no biotech genius or highly decorated biotech researcher, I'll leave that decision up to the experts. I will say this though... it sure looks like the activity in the stock today is a huge effort to simply shake weak hands. Look at how the stock opened just under the summer support level. That's no coincidence. Look at how huge the volume is and it's up from the open. That's no coincidence either. Let's see where it closes and how it reacts over the next couple of days. If you like speculative ideas and you're opportunistic, which we continue to suggest in this current market environment, looks awfully interesting at this level for long-term players. However, if you're thinking about taking a stake, let things calm down for a while first. s for the rest of the market, we'll be kicking off a whole new batch of options next week, so be prepared for things to get real interesting yet again. If the recent theme continues to hold true, just wait and see what the major indexes do for the first few weeks of the new options period, then go the other way. Contrarian hasn't been a bad play at all. Warmest Regards, SmallCap Network Disclaimer The SmallCap Network Newsletter is an electronic publication committed to providing our readers with useful information on publicly traded companies.

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