Hi Spatchcock, The option resolution had us all guessing since it has been made public.
I would tend to agree with your second choice as to explain why this resolution was put up for shareholders approval. This, though, I'm pretty sure, is not the whole story to it as it would be too transparent. It, naturally, also allows every other option holder to delay the conversion money to a later point.
In all scenarios listed below extending the options might really be worth while for everybody who is invested in the option play.
1, Share price is appreciating greatly upwards due to an ann coming out within the coming weeks. At such an event shareholders could sell some or most of their heads to lock in profits ( always important to do this even for the most convinced long term investor ), for instance if they were invested for a longer period and want funds available for other investments ( especially when they were holding longer than a year and look at 50 % tax excemption ). The extended options would allow them to convert after the news at any given time within the next year to stay exposed to the developing growth story. Resolution 5 would help to stay invested with very little additional financial outlay.
2, Share price stays flat as no news appear. Shareholders have the chance to stay invested with their otions without having to find the conversion money at this point in time.
3, Share price is slowly rising as accumulation is ongoing due to instos gearing up exposure to the company since GSK has announced a development program with OBJ which sees the registrar being dominated by investors and not traders. One would like to delay converting the options until price would have reached the level where it seems most lucrative to sell a few of the new heads and stay exposed with a much lower average price on the heads.
In each of the scenarios it is a positive for holders to have an extended exposure to OBJ through options without having to invest any considerable amount of money.
My very personal view though is that several negotiations with partners are nearing the definitive point in time where the wording " licence deal " becomes part of the process.
Both most recent anns surprised. Most shareholders did not expect GSK to announce, the overwhelming impression on this forum was that news almost certainly would not arrive from GSK. The second FMCG was also surprising as it turned out to be a new entity announcing an LOI of a Strategic Alliance.
Therefore Im convinced that things starts to progressively fall into place for OBJ at an increasing speed. Turning points define themselves as being not slowly progressing but to exponentially unfold.
This leads me also to the assumption that OBJ management wants to allow staff or those close to the company who have substantial amounts of options to stay exposed to the growth prospect and not being forced to sell out as they might not currently have the money to convert. Its a guarantee for large option holders close to the company ( and all others ) to participate in the most lucrative way , probably already anticipated by management, when news of a licence deal will be announced.
OBJ Price at posting:
2.8¢ Sentiment: Buy Disclosure: Held
(20min delay)