Hi,Cheyne. I read your post, I understand you analysis, I like your mathematics, but I think such a deep technical analysis at this stage gives a too great an optimistic conclusion. I have taken a more moderate approach, based on what we know at the moment. I don't see it as pessimistic, just cautionary.
Firstly, I will summarise my thoughts saving readers from the boring details.
LCK has a share holding of 827,512,648 (the following details are in the announcements)
LCK offered 110,000,000 free listed options.
- 108,775,478 were taken up.
- 28 cents Exercise Price in three years.
Your analysis indicated at least $1.00 per share.
If this came to pass, $108 million worth of shares would be issued for a cost of approx. $30.5 million (108,775,478 X $0.28). Sweet pickings, but not a good look.
I don't think any BOD would put themselves in such a position. IMO, this would not be a good look, especially if they happen to hold these options. I have no idea as to whether or not they are allowed to participate.
The BOD knows the big picture which is more than we do. I believe that, in their wisdom, 28 cents (+/- 10%) would a fair and reasonable assessment of where they think the share price will be in three years. In a situation such as this there would be little profit or loss on both parties.
Options are tricky. I have sold listed options, but never have I exercised any. There is anecdotal evidence and a school of thought that options are very seldom exercised. Be happy, the market has already knocked 3 cents off the buying price of your shares.
Anyway, buying shares now at 10 cents and getting 28 cents in three years , I think is a damned good investment.
My thoughts only. J L.
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