Options were issued to Macca because they had a hurdle exercise price and date. So unless the underlying share price is above the strike price, the options aren't of any value. This is to establish alignment of interests between lender and borrower. If we issue shares to them, Macca would have sold them on day one.
Same thing with employees. The options are usually issued with a higher price so that they have to earn them.
No company would buyback its own shares and then hold on to them. Red 5 is the only exception that I can think of where it merged with Silver Lake, who in turn had bought a stake in Red 5. Red 5 decided not to cancel that stake, choosing to sell it in a block auction to institution buyers.
Lastly and most importantly, STX does not have an extra 10mn floating about. It would almost certainly set back the funding (and timing) for OH2 drilling. It's a big no for me. I'd rather they spend the money doing what an O&G company is supposed to do - find and develop O&G assets.
10mn = approx 58mn (2% of SOI) shares at 17c. Given there had been 302mn (10.67%) short sold to date, and there is approx 4.4% available to lend out by the three index funds, that 2% would stand next to no chance of making a difference IMO. The silver lining in all of this shortselling is that the market as a whole has essentially managed to absorb 302mn of shares coming onto the market to date. Yes, the price has taken a hit, but when that much volume hits the market, the price is always going to take a hit. If the index funds are to liquidate their 15% holding in a massive block trade auction, I am sure the resulting bid price would have been at some discount to market price.
Instead of buyback, I'd suggest wait till the dusts settle post ASX200 exit and see where STX lands.
618
STX Price at posting:
17.0¢ Sentiment: Buy Disclosure: Held
(20min delay)