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Scoobysnacks

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05/07/17

11:47

Post #: 25675674
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Originally posted by RobbieinAus ↑

Hey Scooby,

So the CN holder needs to sell at approximately 72% of the conversion price (ie. a 28% buffer below the conversion price). 72% is break even, above that is "profit", below that and they are losing money on lending. This is true no matter what the conversion price is.

Keep in mind -- this "profit" that everyone is all up in arms about - is essentially interest on loaned funds plus the 10% discount on the note.

So for example, they converted at 1.9c in the last batch. That means they need to sell at above 72% of 1.9 to walk away with more money than they loaned- or they need to sell at 1.4c or above.

Also keep in mind - the conversion price is set at 20% above the average 2 day vwap in the preceding 5 days. So theoretically, in a flat market, - they have already started eating into this 28% buffer thanks to the conversion premium.

I'm not sure if the $350k cap has hurt us more - they are still always confined to the 72% of conversion price floor. So perhaps if there is enough demand above the 72% floor - they could have unloaded more in bigger batches. This would have accelerated the pay down process rather than the wound followed by a slow retail bleed. But if the demand isn't as plentiful - they'd likely stage it out in chunks in order to let the demand refill like they're doing anyways.

I'm inclined to agree with you though - I think it probalby has hurt us more in the end. In times of high demand - they could have just gotten this over and done with. Instead we have a big CN selldown usually creating 5-15% hit to the SP, then trailing retail sales over the following weeks, coupled with reluctance for new investors to enter with CN hanging to slowly bleed us to death.

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Have you got an updated calender of expected dates that more conversions can take place and the amount each conversion value can be for. I remember you posted one previously when the amounts started getting split up but couldn't find it. Cheers mate

XPE Price at posting: 1.4¢ Sentiment: None Disclosure: Not Held
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