You are correct Cutty...this sort of loyalty option issue has...

You are correct Cutty...this sort of loyalty option issue has been done to death in the past by others and is flawed in many ways:

1. It often kills liquidity in the aftermarket until after expiry, as new buyers on market can't really be certain what the NTA dilution is likely to be until the options expire or are exercised

2. It also doesn't really improve liquidity afterwards much either, as it doesn't broaden the ownership base...the same people with the same views just own more shares.

3. It creates unwarranted cross subsidisation amongst the investor base. For example, it would tend to hurt loyal pensioner shareholders who can't increase their growth allocations further, or those who are cash strapped and can't participate, whilst favouring those with new capital. At least with other forms of discounted capital raising such as a rights issue for a normal company, there is usually a decent strategic rationale reason for raising the new capital that hopefully improves the lot of all shareholders e.g. a strategic acquisition that further diversifies the business and provides growth potential. For a listed investment company, there is no such hope, all they'll do with the capital is buy more of the same stocks...there are no meaningful synergies that justify the cross subsidisation.

But hey, who cares...it works for the fund managers...increases their fee base! This PTM Board is, sadly, quite low quality (not as bad as MFG though).