In regard to the options issue, I hear what you are saying Moly,...

In regard to the options issue, I hear what you are saying Moly, and it is a legitimate view.

If you are looking for a SAFE investment, buying BTV at 8 cents, when they NTA is 19.76 cents*, is a much safer investment than buying the 1/2 cent options which have a 15 cent strike price.

I suspect that the options issue will not be fully subscribed, both due to the market conditions, and due to the big gap between the current sp and the options strike price.


Having said that, a couple of things are worth noting.

(1) the expiry date is 15 June 2012. This is over 3 and a half years away, which is VERY long dated, and a lot can change in that period.

(2) the strike price, (even including the half a cent cost) is 4.26 cents BELOW CURRENT NTA PER SHARE.

(3) IF the BTV share price increases only to the NTA per share backing, the options would return 852%.


So if you take the current share price as a base, it does seem very speculative. But if consider the current share price way under fair value, it is quite reasonable to expect that BTV share price will climb to its NTA some time in the next 3 1/2 years.


But for those of a more conservative bent, BTV at 8 cents has heaps of upside IMO, and with a proposed buyback of another 10% of shares, the value per share will improve further whilst supporting the price.

(If we assume shareholders vote for another 10% buyback, and the average buyback price is 8 cents, NTA per share increases to 21.07 cps.)


* NOTES:

NTA per share. From the BTV Options Prospectus. At 27th October, Net Assets were $24.115m, with 122m fully paid shares. Hence 19.76 cps.