Evening Grumpy, Can you explain why having the directors...

Evening Grumpy,

Can you explain why having the directors participate in the CR on the same terms as other sophisticated investors (i.e: buying newly issued shares for 8 cents each with their own money thereby bringing capital into the company) is a bad thing?

I would think the directors putting their collective hands into their pockets to buy shares at a price higher than the current SP is a sign of real confidence, no?

Taking into account the 2:1 ratio for the options, they're paying 31 cents (8 + 8 + 15) for three shares (after exercising the option) - the equivalent of 10.33 cents per share (assuming the options are exercised). Sure, ALL participants in the 708 CR have the benefit of waiting to see what the SP does before exercising their options, but there is no universe in which this can be seen as a poor outcome.

The shares are being issued at a price above the current SP, and the options strike price is circa double the current SP. And ALL of this injects new money into the bank. Anyone who feels terribly unhappy at missing out on the recent CR can currently do better on the heads on market.

It's not like the board is giving themselves free shares or performance rights - they have to pay the same price as every other participant. And, if you're that keen to take part in issues limited to 708 investors, then go talk to your accountant and get the accreditation. If you're not eligible, go talk to the Commonwealth Government who make the rules in the Corps Act to protect novice / retail investors.

Cheers

Densy