MGU Media Thread, page-77

g’day Nahyeah

I recommend the ASX website. It has great educational stuff.

https://www2.asx.com.au/investors/investment-tools-and-resources/online-courses

The early modules you’ll probably breeze through, but I’d still do them, as there might be 1 or 2 things you don’t know.

In this case MGU issued 50m shares in January at 4c, plus a free MGUO for every 2 shares (so 25m), which convert to fpo’s on 30/9/22 at an exercise price of 5c.

These options give you the right, but NOT the obligation to exercise. If the SP is below exercise price, you simple,don’t exercise and they lapse. If you’ve bought them, then you lose your capital.

I bought the options, because they were trading at more than the 5c difference at that time. So I got a bit of a discount. That’s not available now, so you may as well buy the MGU, unless you want more bang for your buck. You can buy more options for the same $. You end up paying the other 5c in Sep. next year, if you still hold.

The reason they were at a discount, is people got them free when paying 4c for shares. I paid 11c for mine, so whomever sold those to me, has a 7c profit already locked up plus still holds the MGU. So they don’t care if they sell at a 1c+ discount to real value. Once the original owners of the options have sold, the options tend to trade at a bit of a premium, depending on how long to expiry (called time premium). They should be 4.5 or 4 c below MGU).

Hope that explains it ok.

so right now, there’s no value in buying the oppies, as they’re only 4c diff.

cheers,
ned.