Usually LIC managers wait until their share price reaches or exceeds NTA to issue options. The options are a sweetener for long time shareholders to sell at market price and pocket the premium to NTA.
But PMC will issue the options "with an exercise price that is designed to take advantage of the currently depressed level of equity markets".
What does that actually mean? Most certainly a discount to NTA otherwise they would be worthless.
Could it be at a discount to current market price? Or will it be just an arbitrary price slightly above current SP in the hope of a bull market rally? That's the most likely scenario I believe. If the bull market does not materialise they will end up worthless like the PIC options which expired last month.
Their intention is to issue 1 for 4 - potentially 25% increase in FUM. It's massive (especially in terms of management fees!). Issuing 25% new units at a big discount to NTA will heavily dilute anyone not participating. And that's disgraceful!
PMC Price at posting:
$1.19 Sentiment: None Disclosure: Held
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