"Investors need to look beyond the SP and ask a simple question.... why did management just buy more.
"... couldn't agree more, pity DRE bulls cannot see beyond the blue fluff in their navels. Back from hol's and unsurprisingly this thread hasn't become any more realistic in my absence...
Why did management just buy more? He had to... 31.5M $0.005c incentive oppies expiring today well in the money (o.5c vs 1.9c market price = 280% premium) so they had to be exercised.
31.5M oppies at 0.5c cost $157k to exercise, a reasonable and bargain investment had he injected fresh cash given they are 280% in the money at the 1.9c with so much upside (worth $598k @ 1.9c) and then no tax involved until those 31.5M shares are sold.
He didn;t of course, he sold 20M shares to pay for the oppie conversion because letting go $440k worth of oppies would be crazier than FQM continuing on with the Money JV and stumping up fresh $160k to net increase his DRE exposure also seems a little crazy from where I stand. Can't blame for selling to reduce exposure risk, but selling 20M shares worth $360k to cover the $160k oppies conversion and tax on $360k share sale looks like he's taken more off the table than required?
20M shares have cost base of purchase price assuming (13.5M shares at 0.3c in 2019) and rest oppie conversion price 0.5c plus oppie valuation at issue (~0.2c avg) for an overall avg cost base roughly 0.4c rounded down. 20M @ 0.4c = $80k cost base, sold for say $340k @ 1.7c = $260k cap gain. Apply 50% CGT discount because shares held more than 12 months = $130k CGT, @ 47c top tax rate incl medicare = $61.5k tax on $360k sale.
$160k oppie exercise plus $60k tax = $220k required to raise but $360k sold, so he pockets $100k cash after tax over and above requirements by my maths from the deal. See what Chappie paid later to refine the final amount. Like I said, can't blame him for taking the opportunity to cashout, and not just because of the risk, unlike retail holders directors share investments are like the Hotel California....
(20min delay)