I will be interested in the options as well. Short term over supply event, followed with longs wanting their Break even for their existing positions will be much higher if averaging. So some supply will come from the CR profit (without averaging), but others may want to wait for the bounce, buoyancy to lift the average back closer to their cost price.
Why would you sell at 1c, just to free the option carry or vice versa, when you are averaging down a position, from at least 3-4-6c, down to half that. ?
So some supply will come from the new scrip swap at 1c, others may want to wait for the buoyancy level to be reached.
Depends if it just looks at MC, or EV.
ie, if the company was worth 30m a month ago, does it trade at 30m mc afterwards ? or what is it worth then with an extra 10m in cash ? the EV is MC + debt - cash, and that EV rather than MC should be balanced.
Eg. before, 3c = 30m mc - 6m cash = 24m ev Same After 24m EV = 40m mc - 16 m cash (so approx 2c per share)
And if you just want the same MC, then 30m mc approx 1.5c per share.
And some longs, might want to hold for the upside on sales and forward progress to reflect in an even brighter MC.
OSL Price at posting:
1.0¢ Sentiment: Buy Disclosure: Held
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