angry...No...a 1 for 5 is better for the company, as they still...

angry...

No...a 1 for 5 is better for the company, as they still need to limit the fully diluted position for future market cap consideration when it comes to corporate driven "activity", such as acquisitions, mergers, future capital raisings, etc.

Further, a lower ratio (ie 1:5 versus 1:3 or less) will help the "ex date" effect of a pull-back equal to the benefit of holding pre and post record date.

As it stands, the maths suggests if one held 1m shares, they get 200k entilement options at a cost of $8,000...as such, a person with 1m shares, assuming they needed to sell to pay for the conversion, would only need to sell say 32k shares at 25c to fund it.

In other words, the maths suggests the immediate downwards pressure would equate to a net exit of approximately 3.2% of the register...or some 9m shares in the 25c range...this of course is a worse case scenario, as most of those with 1m shares will be able to afford the additional $8k to pay for the options.

The reality will be closer to a 4m net exit.

In addition, we would likely see a few temporaries enter...and exit...the stock in this period, but here we get a cancelling out effect, with the buying and selling from temporaries creating little more than a short-term spike that will will see the stock hold a portion of this gain.

So...we can expect some temporaries buying in, which will likely see a 10-15c influence...and the same temporaries exiting, but this will only likely have a 7-10c influence on the down side...so a net increas of 5c after all is said and done, above and beyond the ongoing re-rating process.

Existing holders would be wise to dig up the funds for conversion...then go fishing and avoid doing something stupid.

Cheers!