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@l-a "no evidence for this atm"
He said it was "just a hunch" when he first said it.
I don't agree with his hunch, it doesn't make sense to me, but I don't ask for evidence for hunches, either, LOL.
22.00 "The timing of the warrant exercises are I believe being guided by GGP management" - no evidence for this atm
The timing of the warrant exercises are I believe being guided by GGP management. GGP need the cash to finance value enhancing company activity, the warrant holders cough up to finance this and then those outstanding warrants are able to be exercised at an improve margin as the price improves as per positive company developments. The cycle continues until all warrants are exercised. Then we have the options...imho
agree tmt would not exercise early my thoughts are once the share price has moved well past exercise price you get the choice ... convert sell what you need to and run the balance.. holders choice on how to play it ....
Tmt*
Cheers fmt you answered my question to on I geuss these 1m buys might have something to do with it...
Unless you were intending to sell the whole lot of them. Otherwise, you'd wait, in case disaster hit, and the price dropped below the exercise price.
@MDC1, but why would you exercise early? Likely in most cases you wouldn't, would you?
Thanks guys. As they say, every day is a school day.
Schlemiel you have said what I was trying (in a clumsy way) to say earlier today. I think so too ! Carefully coordinated military operation. strategic and timely and so as not to cause too much disruption!
just my view after the conversion of warrants for stock my experience is that you sell whatever the number of shares you need to pay for the warrants (CONVERTED) plus whatever tax requirement is needed and keep the rest if your a believer ....
just a view ......
@noobz
Can't quite decipher everything you said there, but if the 24m shares issued for warrants this month were all sold, it would have helped hold the price down, certainly. But they've been absorbed, which suggests that someone (or multiple someones) have been doing some serious buying, too.
@schlemiel
I think that any substantive coordination would require disclosure and might even be illegal market manipulation. It's one thing for market makers to play games with bid/offer spreads and quite another for the company itself to be coordinating with shareholders as to when they will sell shares.
There might be some "wink and a nod" going on but I'd guess most people are just doing what they perceive to be as in their own interests. I don't see enough warrants in today's RNS to make me think this is a huge factor in what we've seen in the market, either.
I’m assuming this 2.5p option would tank the price a bit lots sells then low level are buys? The look few 10 bagging and getting back In at not much hit on avg
I think the warrant holders are working with GGP management and managing the warrants exercise program in a timely and strategic manner. I don't believe the two parties are acting in isolation. Just a hunch but if so then it's an indication of a properly run tight-ship
Or a T/O where warrants and options are out of the way.
Excellent posts TMT, thank you!
@aidinandabettin
Right. So here's part two. As you said, "the warrant holders buy them at 2.5p and sell them at 12p," and as you said, "fair dues." No one should complain about it, we might not be where we are if they hadn't put up cash back then.
Except, maybe not. There's no guarantee that the warrant holders who are exercising their warrants are selling -- but probably most of them are. Their warrants don't expire until next year, so why would they exercise them now, and pay that 2.5p / share, if they aren't intending to sell them? There's at least a few reasons they might be exercising and holding.
1. There might be tax considerations. Depending on where the warrant holders live, they might have a big tax hit when they exercise the warrants at a price far lower than the market price. Different jurisdictions have different tax rules. It might save them a lot of money on taxes to do it now when the price difference is 10p rather than next year when it is maybe 20 or 30p.
2. I haven't researched the terms of the warrants, but they might not have the right to convert and have a vote if there's a takeover offer (hostile or otherwise). If they don't have that right, they may want to convert now so they have actual voting shares if that happens. If a warrant holder thinks that is imminent they might put up the cash to convert now.
3. They might just feel uncomfortable about the thing and want it done. Most people won't be this way but some will. Maybe they want the liquidity immediately if they need it. Maybe they just aren't logical and so won't wait, even though from a purely mathematical / logical perspective it makes sense to wait. Whatever the reason, they are doing it.
4. Maybe they want to increase their shareholding on a break-even cash perspective. They exercise their warrants and sell 20% of the new shares, and get their money back. This isn't entirely logical, either, logically it only makes sense to exercise the shares you want to sell, but people do that kind of thing.
Some of all those things may be happening, but mostly, people who exercise warrants early are doing so because they want to sell. So those who say the selling is probably warrant holders are certainly at least partly right.
Note: The warrant holders will certainly have the right to fully take part in any takeover, so the warrants should be included in any calculation of the distribution of takeover proceeds. I suspect they also will have the right to exercise the warrant and have a vote, despite what I said above -- it will be in the documentation, one way or another. Also, warrant holders will undoubtedly exercise if there were to be a special dividend after, for instance, a sale of part or all of our share of Havieron.
Apologies if I've made any mistakes in these last couple of posts but I think that should give a reasonably clear picture of what's up with the warrants.
Thank you TMT, that was a good read and extremely helpful.
Thanks TMT. So the warrant holders buy them from GGP at 2.5 and sell them at 12. When GGP needed the cash in last August, so they ponied up, so fair dues.
They seem to be drip feeding them into the market, so this means it is more than likely somebody protecting their existing holding, which is something of a comfort.
@Steven, a lot of people seem confused about this so will try to help.
Last 12 August, GGP raised funds for exploration by issuing new shares. You can read about it here: https://www.lse.co.uk/rns/GGP/greatland-gold-plc-greatland-raises-42m-and-appoints-joint-broker-q9mgbp276msbrhc.html
Briefly, they sold 225m shares at 1.85p per share. That was a good approximation of the market price at the time. Since the new shareholders weren't getting a discount to market price, they were instead offered another incentive -- warrants on a 1-1 basis. For every share they purchased, they got a warrant for another share which they could purchase at 2.5p per share. Those warrants were good for 2 years, if they aren't exercised by August 2021 they expire.
Obviously, it made no sense back then for warrant holders to pay 2.5p per share, they could just buy them in the market for around 1.85p. But now, it makes lots of sense for them to do so, since those shares today are worth around 12p (depending on what mood the MMs are in at the time you sell, of course, LOL).
These are the warrants that are being talked about. Basically, it's a contingent liability for the company that they have to sell these shares to the warrant holders at this absurdly low price (given today's market) anytime the warrant holder says, "Do it now." The drawback is it dilutes the shares. The advantage is that it gives GGP more cash to drill holes wherever on God's blessed earth GH and CB choose.
End of part one, will scribble more in a couple minutes I hope.
Apologies for my lack of knowledge. But what warrants are they sharing and why?
It's not the BOD sharing warrants. They would need to notify the market via an RNS.
Gold futures at 8 year high of 1805.. Great for GGP.
Correct!!