Some of that is me, but definitely not all by any means. They'd have to go a fair bit lower for me to want to increase exposure now. True bottom drawer strategy, this one.
This post is self-serving, given that I hold PYCOAs, but for those who are thinking of buying, read the 25 March 2011 announcement for the full story.
PYCOAs are 1 bull market or 1 good news announcement from being in the money, and with 5 years to run, it's almost certain that they'll get there at some point.
To put some value on possible scenarios:
Buy PYCOA at 4c. PYC goes to 20c in 2 years after announcement of a milestone payment. PYCOA now in the money with 3 more years to run. Sell PYCOA at approx same time premium for 13c each. Total profit = 13c/4c = 225%
Buy PYCOA at 3.5c. PYC goes to 40c in 3 years after announcement of a milestone payment. PYCOA now in the money with 2 more years to run. Sell PYCOA at 4c time premium for 33c each. Total profit = 3.5c/35c = 9x bagger.
These options aren't for you if you need that money back in 6 months. Essentially, if you reckon that PYC is going to be a multiple of 9c by 2015, PYCOA is a nice way to gain exposure. I suspect people are selling their PYCOAs to make a bit of "free money" on something they were issued gratis when they took up the placement offer. Looking at that last scenario, I'd be doing it the other way around.
PYC Price at posting:
7.2¢ Sentiment: None Disclosure: Held
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