@Wilbury - My understanding is similar, but not the same.HIO can...

@Wilbury - My understanding is similar, but not the same.

HIO can call on put options for up to $200M. When they make a call on the put option, they specify the number of shares to be issued and the minimum price (as previously posted, I believe this would have been 40 cents for this call). The number of shares called on was 25 million. Whilst LDA could have accepted 50% to 200%, they have accepted 25 million (demonstrated by the number of shares recently issued). HIO is restricted on the number of shares it can call on via the put options by 10 times the average daily trading. This is for the period prior to the exercise of the put option by HIO but is only restricts the number of shares to be issued pursuant to the call on the put option and has nothing to do with the exercise price of the put option.

The exercise price of the put option, i.e., the amount that HIO will receive per share, will be determined as the greater of the minimum price (assumed to be 40 cents) and 90% of the VWAP for the 30 days following the call on the put option.

Therefore, it is in HIO's interest to keep the share price up as they will receive more per share for the 25 million shares issued. That is why many of us are expecting good announcements shortly.

LDA may wish to keep the share price low so the have to pay HIO less per share. Therefore, they may choose to sell some shares (if they are allowed to) to keep the price down. However, if they sell too many now and then the price and volume jumps after an announcement, they could get caught out. I assume that LDA has a numbers guy (or girl) that is doing the math so they don't sell too many too soon. We are likely to find out what they have been selling Monday as I expect HIO will provide an updated Top 20.

Hope that helps you with my understanding and any differences between us.