With a 2024 expiry date I think there is a decent chance the SP...

With a 2024 expiry date I think there is a decent chance the SP will go beyond the strike price. In theory many of these options will be exercised at some stage which will raise over 50m for the fund. With that 50m the only assurance is additional management fees for the company, there is no guarantee that 50m will be put to good use. In fact if you go on past performance there is a real likelihood this 50m will be burned. With that being said, what are investors not invested to do when the stock approaches 1.02 knowing the dilution threat? Sure this is offset by payments being made to the issuer, but consider this. The price is 1.01 and the officer price is 1.03, do you buy knowing that the further north the price goes there will be heavy dilution. If the market regresses & paper losses wipe out some, or all, or more, than the 50m raised & the funds income levels fall, then distribution payments get spread across all those newly minted securities, this would just drag the share price down big time. Alternately if the raised capital is put to good use, the benefits will not be amazing as equity is more expensive than debt. If an average company raised funds in 100% equity issuance then it will not increase EPS, in fact in the long term it will have a negative consequence on EPS.

People keep talking about how this options issue are good value because of an exercise price at 1.02 when the current price is .95 & the expiry is three years away. In theory it is a good deal do those who hold the options, but why would be investors not invested want to pump up the share price so you can exercise your options for a decent profit at their expense? This fund already trades at a heavy discount to NAV, but I think the discount would get even bigger around the $1 mark. The fund will have to do really well to drag the price above 1.02 because this options issue will act a massive headwind blowing down from around $1.