Red Emperor.
Firstly congrats for having a balanced view when holding the stock. It isn't always easy to do.
In regard to your points.
1. If they were to spin off HomeOpen into the shell, it wouldn't be 6% ownership. That would value HomeOpen at $0. Should HomeOpen be successful and it is spun off into Liberty, I would imagine there would be a cap raising to bring in new sophisticated and insto shareholders to massively bolster the coffers for marketing and advertising. Some of those funds would be used to compensate ALA for the product as well as an issue of new FPO shares and possibly options to ALA. The proof was always in the pudding for HomeOpen, so if it can deliver, which in it's infancy at this stage it seems to be, then risk reward ratio seems reasonable.
As mentioned earlier though, I believe it is a strategic move by ALA to derisk for further opportunities from Arcamedies with Liberty shareholders shouldering some of the risk whilst we still have exposure as ALA shareholders.
2. You are correct, they haven't doubled their money in Liberty after today (except for on paper). I'm not sure about you but if I am holding securities in a company that are double what I paid for them (even if it is an unrealised profit at this stage) then I am feeling better about it then if it was half!. Anyway, this is not the reason they purchased the shares, it was a strategic move with no immediate desire to offload them. Any move to do this in the future would obviously be off-market anyway.
What I can say as a Full-Time trader though is that come tax time, my accountant looks at my portfolio and I pay tax on unrealised profit, so even the taxman sees it as being a good thing!
ALA is a spec for sure but again risk/reward is comfortable for me. There are very few opportunities to get this type if exposure on the market.
Thanks for the well informed debate all.
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