Can you clarify that only Aus/Nz shareholders are eligible for...

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NobhillSF

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09/08/21

09:46

Post #: 55131357
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Originally posted by Mozza01: ↑

Exactly Suw,

Again, looking at the maths:
For round numbers, let’s say the SP gets to 70c on 20/8.
If you had say 100,000 shares for arguments sake and you were allocated 10,000 options with an exercise price of 35c, you would make a 100% gain on those 10,000 options in the short term at the 70c SP. Your net benefit would be $3,500 which equates to 4.5% of your total portfolio value of $77,000 after the exercise of the options.

Logic would tell you that the short term benefit of $3,500 would be reduced to zero if you sold any shares at a SP that is lower than that 4.5% reduction from 70c…. I.e. anything below 66.5c (rounded). Of course, the share market isn’t always logical and emotions do get involved. Even then, if you double the “logical dip” to 9%, we would still have a SP of 63.5c (rounded) and we would all still be significantly better off than we were only a month ago.

It is also good to remember that it is in the interest of Traders to see the dip go lower - if they plan to sell on the trading day after the record date (23/8) and plan to re-enter at the bottom of the following dip. The greater the difference, the more they have benefited. Keep your eyes open for those “usual suspects” on these threads constantly posting about how big any dip is going to be post 20/8. Don’t be played. The best thing that long term holders can do is to not add any fuel to the fire by selling!

The other thing the Traders will have to worry about is making sure they are not standing on the sidelines when any big announcements drop. It wouldn’t surprise me to see a strategically timed announcement dropped between the record date (20/8) and the expiry date of these options (15/10) - even though these options are already significantly “in the money”.

I’ve run some numbers and have made up my mind that it is a far better idea to sell other holdings (that are not likely to perform as well as LKE) to fund any exercising of these 35c options rather than to sell LKE heads. The upcoming news flow, if it gives anything like the Orior Capital SP target (approx. 11 months now) of $1.89 implies a possible further uplift in the SP of 286% in that timeframe! Why on earth would you want to sell LKE heads to pay for the exercising of these 35c options if that is the case? If you have other alternatives to fund the option conversion, you will not only reduce the selling pressure between 23/8 and 15/10 (helping keep the SP stable) but you will also end up holding 4.5% more LKE shares in number……with every one of those shares having the potential to rise in value by that 286%.

I won’t be playing into the Traders hands by selling heads to exercise my options…..and I think that every long term holder should consider this as well.

Not financial advice. DYOR

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Can you clarify that only Aus/Nz shareholders are eligible for bonus warrants? Is that due to just hard to transact OTC in US? Volumes have been high over here as well. It will render my decisions easy.... Thanks.

LKE Price at posting: 66.0¢ Sentiment: None Disclosure: Held
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