I guess the point here is that for many reasons the ' Market ' and ' Investors ' feel that the Stock is worth it's fundamentals in paying NOW virtually the full 2.5 cents than ' Risk ' that the Value of the business soars that much that it becomes almost out of reach in terms of further ' premium ' paid.
And a lot of it has to do with
THREE factors .
ONE is that there would be a considerable amount of NEW investor's buying these ' Partly Paid's ' who as mentioned have missed out and so are prepared to pay the ' Known ' costs now given their perception of 5.0 cents plus value on the stock in 3 years time. There are also existing shareholders who have much lower average entry costs who also are prepared to accept the ALL up potential cost of 5.0 -5.1 based on the 2.4 - 2.5 cents paid NOW.
You also have the Insto's who have obviously missed out in the issue given the Top 20 is represented by ONLY 20% , with 80 % in the hands of the retail investment community , and so who also would have a longer term holding criteria and horizon on this particular business model. You only had to see the performance yesterday in the ' small emerging companies ' de facto ETF to see they most likely would be happy with outlaying this 2.4 - 2.4 cents now for their ' perceived ' growth to be realized later.
And you have to consider the Insto's by nature of the ' Entitlements ' issue are also potentially sitting in the 80% bucket at the current moment and who really need to be in the 50 - 60% Top 20 bucket as per their investment mandates.
So there is some considerable buying impetus being reflected in that need to actually ' rebalance ' , and tighten up the Register as we move forwards with the growth of this company.
No
TWO would be the obvious ' Liquidity ' and traditional ' Time Value ' aspects of normally traded ' vanilla ' company options as these two attributes relate to the above reasons. However , there is NOTHING normal about these ' Partly Paids ' because in a sense they Guarantee you ONE FIFTH of the companies currently available traded capital PLUS the right to participate in furture capital raisings should they be converted with in 4 days of the record date of any future raisings. So what is they were to do another 1 for 1 raising down the track when the company is well and truly ' firing ' . Or what if it were to be a 1 for 5 or another 1 for 4 - wouldn't you then convert so you could participate on a 1 for 2 basis instead of say 1 for 4.
And so my
THIRD reason , and dare I say the word ' Intangibles ' - However and as much as we might currently hate that word , it really is relevant to these sorts of Business Models. And so this is important in translating what Investor's individual perceptions are to the ' Future Value ' of the Heads . And apart from ALL the above reasons , there is this element of the 1 for 4 ' Entitlement ' which was clearly working in the lead up to the ex- date and cumm entitlement dates as it is now with respects to the Head Stock tracking on what seems to be a ' risk premium ' discount to the ' Partly Paid's '
Simply translated , that would mean that what they were hesitant or ' risk adverse or missed out getting in the ' Offer ' they are now making up for those differences in ' Average ' holding costs now with the purchase of more ' Partly Paid's ' . And because they know this has legs beyond the 5.0 cent fully diluted share price and Market Capitalization valuation.
So there is obviously a lot more going on here than your standard ' Black Scholes Model ' of calculating the straight up mathematical value of the ' Partly Paids '.
And I know there is a long way to go with only 20 odd million ' Partly Paid's ' having been traded in only 2 days , but wouldn't it would be an interesting question to ask ourselves - what would the outcome be if ALL 69 % of the 273,171,601 shares remained in ' sticky hands ' and the only amount really available for trading was the 31 % ' shortfall ' quantity of 124,538,015 which went to joint lead arrangers , staff , and other significant holders........
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