Phishpheet It is of course easy to back trade but FCL could have gone either way. My point was then and is now that FCLPA is a safer trade with a safer return.
Despite the FCL price action recently, I still believe over next two years, FCLPA will prove to be a better return than FCL. The return on FCLPA is less of a "punt" than FCL as FCLPA ranks ahead of FCL.
Making some assumptions, - buy FCLPA at 33 - BBSW 3.5% and margin as per terms - conversion to equity in June 2012 - sale of equity at 90% of VWAP
resultant return is 72.8% PER ANNUM for the next 3 years.
I doubt you will get that with FCL. i.e. FCL would need to be over $3 in three years. Sure, you got a 100% move already but FCLPA is up 50% which is fine enough for me given the better security.
Maybe you should take your profit on FCL and switch into FCPLA? If and when a company issues equity, it can be bearish for equity and bullish for debt.
FCL Price at posting:
43.5¢ Sentiment: LT Buy Disclosure: Held
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