Ann: Expiry of unlisted options and performance rights, page-35

"However, as any smart investor would do, why buy into a stock that is currently uncertain to when suspension would be lifted?"

I think this thinking is what trips up most inexperienced investors - the thinking that when they buy shares, they're buying a quote that's bought and sold on an exchange, rather than a small piece of ownership of a valuable business.

If you treat buying a share of a company as owning a small slice of that business - and by extension a share of the stream of profits generated by that business - I think you'd quickly realise that this small slice can be very valuable, even if the mechanism to sell that slice doesn't involve selling it on disallowed.

As an example, let's say the ASX tomorrow delisted BHP permanently for whatever reason. You're offered to buy a share of BHP for $12, or about a third of its last traded price of around $37. This is still a good deal. Why? Because BHP earns a stream of profits, equal to about $3 per share, each year. If you had an opportunity to buy a BHP share for $12, you'd make back your investment every 4 years. Who cares if you can't trade a BHP share, if your share of profits over the next 10 years alone is triple your original investment.

As to how this all relates to ISX, well, if the shares were cheap at 30c, in the sense that the stream of profits delivered to ISX's owners would be worth well in excess of 30c per share, the option holder should do well exercising the options and acquiring ISX shares for 30 cents each. In this instance, they have chosen not to - so this perhaps reflects the view of the option holder that he does not believe ISX will earn sufficient profits to justify buying it at 30c.

Sorry for the lengthy post - but I sometimes feel like there are a lot of inexperienced investors on HotCopper, who could benefit from a better understanding of what it means to be a stock holder. Specifically, viewing themselves as part owners of a business instead of the owner of some intangible mysterious object with a price that fluctuates from day to day on a market.