options, page-4

Damon, i've said for a while that the price won't surpass 17cents due to Oppies though not sure if i'm right on that one hence bought in at 18cents. I suspect your probably right that the share price will drift lower though not as sure that's all.

I'm thinking of it this way - when Dec 31 expires the share price of AMM, as you would agree should be say 25 to 30cents. Well prior to Dec 31 wouldn't you buy what you want (say a few hundred thousand shares) even at 18 or 18.5 knowing that they are and will be worth a lot more. Otherwise if you don't, there is no sell depth potentially -hence i bought and am buying bc i might miss out if the sell down doesn't occur and there is a quick overnight re rating - happy to buy at 18cents, see them fall to 17cents next few months though i'm in and should see it closer to 30cents.

I'm suprised they've gone to where they are. Another factor that may support options being exercised is insto's buying more shares (with their options) in order to grab a greater slice of this great little company. Even if AMM trades at 17cents, its a great chance to own more by exercising options so i'm tending to think that options will be exercised regardless of the share price. May be wrong.

In short term share price will jump and maybe clear 20cents on the back of annual results and particularly if they mention east coast expansion - traders will jump in or papers will report great news without giving thought to any overhang of options or even knowing much about them - lot of uninformed people buy and sell everyday based on sentiment/momentum/gut feel etc etc.

For annual results FY09 first half had EBITDA as 8.5. With growth of say 30% i expect full year EBITDA of say 19m. Multiple of 6 times (though will probably take some time to trade up to peers due to perceived risk/small company etc) would place company value at $117m. IIN investment is worth circa $73 and discount that by say 15% to market price shows $62m. So AMM should be worth circa $179m for FY09. Earning multiples are done on end of year financial forecasts so lets add 20% (not unrealistic given that both AMM and IIN expect higher annual increases for FY10) shows $214m. This equates to 40cents per share!

With options lets add 270m shares and say they receive 100% of funds (unlikely) thats $46m. So company value would be $214 m plus $46 gives $260m or 32 cents per share.

Either way i expect 25cents to 30cents in 6 months time though we need coverage on this telco for analysts to realise this value.