oppies placement

Please correct me here if I am wrong. A friend mentioned it would be a good time to enter VEC given current market weakness and also the upcoming sale of loyalty options. Upon reading the latest announcement there will be an issue of loyalty options to ordinary shareholders, and another issue of options of equal terms through a placement to clients of Indian Ocean Capital.

The second part worries me. If clients of Indian Ocean Capital already own VEC stock currently trading at 28c - once they are told their entitlement under the placement they will be able to sell an equivalent amount of stock (original holdings) on market whilst maintaining their total exposure to the company.

e.g.
If own 1million VEC, and I.O.C offer me 1 million VECO at 1c, i would sell my VEC at 28c, pocketing $280K. It would then cost me $10K to purchase the options. Effectively I would have the same exposure to VEC at a fraction of the cost. Hence my theory its in the interests of I.O.C clients to sell down their heads after learning of their oppie placement entitlement.

this in my opinion will lead to downward pressure on the shares (to around the 20c mark) that will more than counteract the increased demand for shares driven by the pro rata entitlement loyalty options.

anyone else had similar thoughts?

cheers