re: wow perrenial -- this stock is a monster The fees go like this: its 20% above the Benchmark Rate.
The Benchmark rate for this year (end of FY 2002/3) is $1.65. For any share price above that, 20% of the difference, goes to to Widdup & the Management team. The Benchmark moves up roughly about 20c per year. So at end of FY 2003/4, the hurdle rate would be $1.85.
The fees have to be paid in cash and could become a burden on cash reserves. I can envisage a situation where there is not enough cash to pay the fees (if the company is relatively fully invested) and some investments have to be offloaded at possible inappropriate times, to meet those payments. Or a capital raising could be on the cards. If that happens, I'm out the door and selling like mad.
For example, if the share price is $3 by end of FY 2003/4, the BRate will be $1.85. The diferrence is $1.15. 20% of the difference = $23M. Shareholders have to pay $23 million cash in "Widdup Tax", which equates to 23c per share.
LSG
lion selection group limited
