Unless I’m missing something very obvious, this is how I see the scenario, also assuming you meant buy on market vs SPP as opposed to not buying IMU at all:
5% discount to VWAP, so likely a discount to what you can buy at today assuming the price doesn’t rally from here.
Price hits 20cents your shares are worth 476,190 x 20 cents = $95,238 therefore profit of $65,238.
Example two: Buy $30k in the SPP, with the price falling currently itslikely you are almost guaranteed a discount to any market prevailing price. And you also don’t need to ensure your buy hits at the bottom.
A 5% discount of 6.3cents (assumed VWAP), is 5.9 cents.
$30k @ 5.9 = 508,474 shares and 508,474 options
Price hits 20cents shares are worth $101,694 therefore a profit of $71,694 so $6k better off.
Now factor in options, in the money, too many factors would need to be assumed here around a reasonable black scholes price but let’s assume they are exercised.
Either someone folks out the extra money ($60k) or sells heads to convert.
Covert with cash: Convert with $60k bring total investment to $90k. Total value of holding = $204,000. Total return $114,000.
Sell heads to convert: Need $60k to convert, so sell 300,000 shares (of the 508,474, not accounting for CGT) and convert to have a total of 716,948 which have a value of $143,389 and mean a gain of $113,389 for your $30,000 investment.
I’m in the camp of the SP being above 20 cents in 3 years, far from any guarantees there but that’s my take, and why I see the SPP as a no brainer if I believe in the story, Of course open to any other thoughts and happy to be corrected on any errors, it’s been a long day driving around Umbria/Tuscany for me.
(20min delay)