Hi Nagarjuna,
Crucial Date coming up ...
I commend you for your well-intentioned post - but I sincerely hope that all option holders (I'm one) already realise that they must pay 28.5cto convert them to shares before 20 January 2021, otherwise the option lapses and is worthless! Holders should already know that, having done their own due diligence (since views on HC can be out of date or not perfectly accurate).
Only ~ 5 million listed options left as of today
Speaking of which, as Paulfool said - this Appendix 2A makes clear in Item 5.1 (it was lodged on the ASX and appears here on HC) that as at Friday morning there were only 5,086,816 listed options(expiring 20 January 2021).:
https://hotcopper.com.au/threads/ann-appendix-2a.5799388/?post_id=49348345
The difference between that ~ 5million and the amount you referred to is options already converted since the date of the document that you must have looked at (several Appendix 2A docs. have been lodged recently). That ~ 5 million number will continue to drop as option holders do the necessary conversion in the lead up to 20January 2021.I've done some of mine but not all.
Don't have to sell many shares to cover conversion price of 28.5c
You rightly pointed out:
- the conversion price is 28.5c per option
- some VULO holders may sell some VUL shares after paying the 28.5c conversion price. Even if they do, however, with the shares ~$2.13 (today's close)...
- IF, for example, you converted 10,000options (ie. costing $2,850) ...
- THEN you need only sell 1,400 (i.e.14%) of what you converted to entirely cover the cost (1,400 x $2.13 = $2,982).
Not much effect on the market
Chronas1 I'll be a bit surprised if there's much downward pressure. The entire conversion cost of all the current ~5 million VULO would only require:
- the sale of ~700k VUL shares at the most. However sales are likely to be less than that as some holders will have some $ available to pay the 28.5c conversion cost for some of their VULO if not all of them. Notice today that the price was up a cent after the recent small batch of conversions;
- any sales would be scattered across the period between now and 19 January 2021, so should not be too influential. There were 28.5 million VUL traded during November alone, 13 million in October and nearly 31 million in September. That's over 70 million in twice the period that now lies ahead until option deadline date.
I don't know how busy December-January will be (the PFS period) but assuming 700k 'extra' VUL get sold as above, spread across the next month and a half - even if biased to the next few weeks - that should not have much detectable (if any) effect I would think??
$1.4Min the kitty
Whether I'm right or wrong with that, as homebrew027said, if they all convert – and >99% will – our great company gets another$1.4 million in the kitty – and that's better than a poke in the eye with a burnt stick.
Now for the PFS!
(20min delay)