It was interesting to see that approximately 2.1 million LOMOB changed hands today "versus" approximately 3.1 million heads.
In my opinion, this seems to indicate that investors / accumulator has determined that buying LOMOB options is a better "indirect" way of buying more LOM heads (by simply exercising LOMOB before expiry) for a similar price as the LOM heads.
Yes, before anyone posts otherwise ... I am assuming and concluding that the LOMOB will be in the money at the end of April 2016 (This is not what I want to discuss here).
The investors / accumulators have determined that trying to buy over 5 million (Volume of LOM & LOMOB today) ... would be impossible and place a lot of upward pressure on the LOM share price (very illiquid and tightly held stock ... by the believers anyway)
I believe a fair portion of todays larger LOMOB trades, have purchased with the intention of exercising the LOMOB and eventually holding LOM heads (with very little premium having been paid).
There is very little premium on the LOMOB share price as LOMOB holders that are unable to source funds to exercise them are offloading.
This will change the nature of the LOMOB holders, so that the "resulting" LOMOB holders will be those that:
(a) are willing and capable of exercising their LOMOB holdings;
(b) will not sell their LOMOB before expiry;
If enough there are more of these LOMOB holders ... the LOMOB options will once again start trading at a small premium ... on the basis that less LOMOB's will be available for sale and investors and accumulators that want to buy "more" LOM heads indirectly via LOMOB will be willing to pay a little bit more.
I generally disagree with posters that have a general perception that one must sell LOM heads to find funds to exercise LOMOB.
This is assuming that the LOMOB holder has no access to any other funds besides their LOM shares (big call)!
I'm sure the rick taking LOMOB holders have access to non LOM funds (other shares, investments or borrow on property assets, etc.). Why would you sell a "good thing" (investment) to re-invest into the same "good thing" company, when you could hold twice as much of the potentially good investment.
I for one, will not be selling any LOM, LOMOA or LOMOB in order to exercise my LOMOB (which represents more than all the LOMOB options on issue).
It should also be noted that a lot of LOMOB holders would only be holding small parcels (based on LOMO options issues and subsequent 2 for 1 resurrection).
Enough rambling, what I want to hear from LOMOB holders as follows:
1. Optional question - Whether (in your mind) you hold small, medium or large parcel of LOMOB;
2. Whether you intent to (a) fully sell (b) partly sell or (c) no sell any LOMOB before expiry ... or (d) may be tempted to sell LOMOB if the gain is too tempting not to realise at the time;
3. Will you fund LOMOB exercise price from (a) Other LOM investments / holdings or (b) other sources (non LOM holdings).
My answers to the above questions are as follows:
1. I hold a large number of LOMOB options;
2. I will not be selling any LOMOB options;
3. I will fund LOMOB exercise price from other (Non LOM) sources;
Obviously, as indicated before ... I am holding my LOMOB till the end and exercising all of them:
(i) as I am confident in LOM and where it is going;
(ii) in order to eventually take advantage of the 50% Capital Gains discount when I eventually sell the resulting LOM after April 2017 (12 months after exercising LOMOB);
GLTAH (Not that Luck is involved!!)
Zippy1
LOM Price at posting:
42.5¢ Sentiment: Buy Disclosure: Held
