Ann: Appendix 4C - quarterly, page-75

Hi All, I haven't followed ISX details for some time, but I really liked the 4C, with the sort of momentum I was hoping for/expecting – but then felt same way as Pockets wrote”can't believe company value is the same as before latest report announcement.”

But I have now read the excellent recent posts re performance shares etc – thanks to all – really helpful - this is the great value of HC to me.

The discussion appears to be saying SP is flat-lining because:
“guessing the sp is flat because some or all of the performance shares are now a distinct possibility.” (tradealot – who added “The dilution will cause a hick up for a while no doubt, but with strong continued revenue numbers, the sp will soon recover. In the longterm it will all be just a blimp on the growth curve.)
vs
“Class A & B Perfs in play..... which in short / medium term adds massive uncertainty.” (roberter1)

I don't see a problem with the timing effect of perfs converting. I'm not a finance guy, but I ran some calcs on my holdings. The way I see it is:
We get diluted (assuming 2 x 17% as per roberter1 post) either now or later. Either way, the outcome is the same, I reckon.
If I get diluted later, after MC say doubles, and simplistically assume the SP has also doubled accordingly, I lose the same % in my holdings value and I lose 2x the $ ($25k vs $12.5k in my case) via later dilution.
But my calcs show, my diluted holdings value goes from $34k diluted now, to $68k later, whether diluted now or later.

I may have gone wrong on my calcs. But it appears to me that if dilution is inevitable (I hope it is, reflecting the profitable growth rates that I anticipate), the timing doesn't matter, mathematically. Appreciate any comments.

ISX is one of my key holdings, at this stage, my plan is now exactly as jlo2012 wrote :
“Short term there is some uncertainty re high market cap but I anticipate revenue growth will continue at rapid pace and this will ultimately drive the SP safely through any dilution. I'm not going to try and time any short term dips in the SP by selling now. I'll hold and if there are dips due to dilution I'll look to accumulate more.”

Thanks again to all for your insightful posts