cOne,How do you get the $14.5 mil in your calcs? This is how I...

cOne,

How do you get the $14.5 mil in your calcs?

This is how I see it. Becuase everyone is entitled to participate in the rights issue, there will be no shareholder dilution as everyone is entitled to increase their holding in proportion to the rest of the shareholders.

Ok so the market capitalisation at the moment is 28 million. The fact is, the options will not be a factor to the market capitalisation until the rights issue is over. No analyst looks at fully diluted market cap - you should look at undiluted as you are looking at the value today not in the future.

If you say purchase 10k of BMG @ 34.5 cents = roughly 29 thousand shares. This in turn allows you to purchase 29 thousand options which should cost you 29 dollars. Now, you should expect these options to be trading out of the money at roughly 10 cents which is a dicount to the excersise price (34.5 - 20 cent (excersise) = 14.5 cents = 4.5 cent discount for out of the money option. Nonetheless, you have 29 thousand options @ 10 cents = $2900.

hmmmm maybe im missing something. There has to be a catch somewhere that Im not picking up on becuase there is no such thing as a free lunch. But this looks too good to refuse for some reason, though for some reason i cant trust my logic.