The thesis is that the vast majority of these in-the-money options are held by former directors (no longer interested in being LT shareholders) who upon converting those call options into shares would immediately/shortly thereafter sell the shares, thereby realizing a nearly riskless profit. The number of shares thus (potentially) coming to market could/would put pressure on the SP due to its (potential) impact on the buyer/seller ratio.
The obvious risks to the thesis are that option holders for some reason do not exercise the options (e.g. lack of required funds for DVP, owners or related parties forgot they hold the options or they are unaware of the SP, etc.) and the SP stays artificially low as investors try to wait out the clock on the options expiration (i.e. they don't engage in normal behavior due to the structural overhang). Another risk is that the holders upon conversion could not immediately sell as greed takes over and they determine there's more upside holding than selling immediately.
The recent trading activity also indicates that some holders have been taking a little bit of their DW8 funds off the table to allocate to opportunities they believe represent higher near-term expected returns vs. DW8 which accounts for the minor give n take we've seen over the past weeks. Put this together and you have a good guestimate as to why the SP hasn't been driven up despite continuous steady positive news surrounding the business as was the case when the base was a lot lower earlier this year (e.g. base effect also plays a role). That may also make it less interesting for pip jockeys chasing ST momentum which takes some of the ST support out.
A lack of ST price momentum is arguable harder for people that bought at a higher SP, but considering where we started the year, what has been accomplished in terms of sales at the firm (e.g. organic growth of cases sold from Jan '20 to Nov '20 -- ex WDA -- is up 456%, etc.) the company is doing exactly what it is supposed to. Maybe the market isn't reflecting that this week or next via the SP, but it will eventually catch up to the fundamental realities. It makes sense to look at things from all angles rationally rather than being pushed around aimlessly by every headline or concern someone may spark. Unless ST trading is your game, ST price movements are often an inaccurate reflection of what is going on with the company and shouldn't be always immediately interpreted as "...the market doesn't like XYZ (e.g the results, etc.). Especially with smaller caps, a single day's trading activity could be simply influenced by some bloke who needs to offload a boatload of shares (that are up 5-7x YTD) to buy Xmas presents or pay for a capital goods purchase, sell shares to pay his divorce settlement, or make margin calls on other investments he thought were a sure thing. Just saying, don't get caught in the weeds and distracted by ST noise.
DW8 Price at posting:
4.3¢ Sentiment: Buy Disclosure: Held
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