Sharks Before I start I just want to qualify that this post has...

First 42 Last

Share
Profile

Follow
Von Rico

4,809 Posts.

1132

02/11/16

12:19

Post #: 20307770
Share

Originally posted by sharks37 ↑

Option holders paid 0.2c for each option when they were issued. Conversion price = 3.4c so total paid per share = 3.6c if options converted.

On the other hand, option holders can currently buy shares on market for 3.0c, so if they do, then total paid per share = 3.2c per share, 0.4c or 11% cheaper.

When the options were issued in 2012 the SP was 1.6c. Now the shares are 3.0c so that's a 88% gain in that time. So those buying shares at the time have made the better choice as it turns out today.

However, anyone buying options does so for the leverage, but they are riskier. As it also turns out, options subscribers have had plenty of chance over the 4 years to sell their options at a good profit - trading as high as 2.8c early in 2013 and ranging in price above 1.0c for most of that 4 years. In fact the options have traded above 0.4c for almost the entire time over that 4 year period - a 100% gain to any original subscriber if they sold. So the original options subscribers have had their chance to do equally as well or better than shareholders over the last 4 years based on the purchase price at the time of the options issue.

As to raising only $3M rather than $10M if I was a shareholder (and I am again, bought back in at 3c) I would prefer the company only raises what it needs when the SP is low, and if more needed then raise again later at a higher SP - less dilution.

As to management getting on with the job, well their job is to run the company the best they can. Our job is to decide whether we back this horse or some other horse that will make us more money...its not more complicated than that.

Cheers, Sharks.

Expand

Sharks
Before I start I just want to qualify that this post has nothing to do with CDY management but just in relation to your last paragraph which is a bit sweeping in my opinion.

You say managements job is to run the company the best way they can and I agree with that. But then you infer that if we don't like the way it is run we should just walk. What if they are not doing a good job? Management should be accountable to the owners of the company and rogue managers should be taken to task. Walking is not always the right option unless you are simply a trader and not an investor.

My comments here refer to all companies and as I say, has nothing to do with CDY management as they are probably doing the best they can. That may be your opinion or my opinion but others may disagree and entitled to challenge.

CDY Price at posting: 2.9¢ Sentiment: None Disclosure: Held
2 Upvote

0 Great analysis

Reply

Top Stories

SKS

SKS secures $20M for extension works on Melbourne data centre

GDP grows 0.2% in June quarter, but annual growth the slowest since the 1990s

Is the ASX getting its groove back? Here's 5 IPOs in September to watch

WGX

Mining start at South Junction adds to Westgold's hopes for WA gold complex

EBR

EBR Systems' heart pacing device on-target to reach the US market