Actually management can have a very big impact on such things...if they want to that is.
For example...say management don't want options exercised...easy, they sit on their hands an do very little...or...they put the word out that a placement is on the cards, say at 9c?
Don't have to do one...but just the "word" is enough to ensure a constant flow of selling above the strike price.
On the other hand, if they want the market to get over the "options issue" once and for all, equally rhey could put the "word" on the street that they in fact will be expecting to see the options exercised and that if they are not, they will organise a placement for the same number at a lower price...but not with any of the existing shareholders.
This would pretty much cancel out the desire to supress the price.
Another tactic, which can work both ways, might be to arrange an underwriter...effectively telling the market the options are a done deal, or in other words, the dilution is a done deal!
In this scenario, if the underwriter really wants to pick up all the options stock, he will cap the price at 10c to prevent the options finishing in the money.
On the other hand, should he only want a percentage of the stock, he will likely push for an 11-12c cap...and in the case where he doesn't really want any stock at all, he will pump the stock as high as possible, so that options all get converted.
So, in this regard, should management decide that underwriting is on the cards, who they chose and how they decide to structure it could have a significant impact on short-term price movements.
Of course, they may not be considering an underwriter at all...especially if they are confident news in the interim will take care of the shareprice to the extent such things are not a concern?
Cheers!
MPO Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
