Wouldn’t be speculating too much or over thinking it yet. I kind of fell into that trap last night!!.
Board will decide what’s best for its shareholders and communicate that in due course.
Many will argue that options are worth zero unless converted and that is true. They aren’t technically shareholders. But they are still invested in the company ie EUR. It is crucial and important cash for the company down the track if all or most are converted. So a smart board and company will consider all parties in making these decisions. Tony is certainly quite intelligent.
So in my case I have just over 5 bricks of B options. These were purchased for the big leverage. A fair bit riding on it. If these were purchased today, those people did so in the knowledge that they have approx 700 days to cough up the 18c per share to convert to heads. Same as the A holders. They would have approx 350 days to pay their 7.5c per share to receive their heads.
Those were and are the rules.
So there needs to be some equity and fairness to all those with skin in the game. It goes a little further than just who owns heads or not. We are all invested. Changing the rules half way through the game is not fair and equitable for all.
Plus the other argument is the sourcing of funds for those option holders. For example, if I wanted to convert 3 million B oppies to heads later this year, I would be expected to cough up 540k in a very short amount of time. Just selling the oppies to pay for them isn’t necessary what all holders will want to do either. So is that fair and reasonable? No. It would put those who own heads at a massive advantage when receiving dividends.
Sounds like a rant, but I doubt very much the company would change these rules mid course. And happy to be corrected later if wrong.
A pro rata system on the value of these options would be much fairer and equitable.
We as commentators on here may also have the structure totally wrong and are worrying over nothing. EUR may have ideas in stark contrast to our comments. There may not even have to be a decision/conversion to make.
We are only speculating after all.
Board will always know far more than the holders on here and they know best. Happy for them to make the decision.
As long as those heads keep climbing healthily, those oppies will look after themselves. In fact… B oppies are actually above its value given that the heads are currently 10c.
A great fortnight of SP gains.
Have a feeling more to come
