RE: EBT: "Undiluted" Confusion; Milestone Share Price Targets24 May 2026 14:05
SilverFoxd
OINK, OINK, OINK……..
My take on the whole “undiluted” situation is this: of course Ashton and parts of the RC will attempt to polish the bad news and roll out the usual nonsense about how the EBT is supposedly wonderful for “alignment,” and how “undiluted” is somehow perfectly acceptable. Bla, bla, bla. Yeah right. LOL. Perhaps some genuinely don’t appreciate the implications this structure could have for the possible value destruction of their own holdings.
The devil here is entirely in the word “UNDILUTED.”
By tying this latest 150m share EBT award for Rod McIllree, Troy Whittaker and Olga Solovieva to an undiluted market-cap target, management appears to have created itself a rather convenient framework.
Let’s use the rough current structure of around 5 billion shares in issue:
Scenario A — No further dilution:
With 5bn shares outstanding, the company would need a share price of around 2.0p to achieve a £100m market-cap milestone.
Scenario B — Additional dilution:
If another 2bn shares were issued for Greenland funding, acquisitions, placings or whatever the next “strategic opportunity” happens to be, the issued share count rises to 7bn. In that scenario, the share price required to reach the same £100m market cap falls to around 1.42p.
In other words, increasing the issued share count lowers the share price required to achieve the same undiluted market-cap threshold. Existing shareholders may therefore experience dilution while management can still move closer to triggering the awards, even if the per-share value growth is less impressive than the headline market-cap figure suggests.
And it gets better (for Rod, Troy and Olga that is).
By specifically using an “undiluted” metric, the structure also ignores the large volume of existing warrants and options already hanging over shareholders — INCLUDING, potentially, instruments benefiting management and associates themselves. A more shareholder-aligned structure might arguably have used a fully diluted basis instead. Funny that.
The issue here is not whether market-cap milestones should exist — many companies use them. The issue is whether this particular structure properly aligns management incentives with genuine shareholder value creation on a per-share basis. Personally, I don't see that it does.
Instead, this looks suspiciously like another example of AIM-style financial engineering where shareholders absorb dilution while management lowers the effective hurdle required to unlock yet more shares.
Classic AIM plumbing. Classic 80M.
As I’ve said before - OINK, OINK, OINK.
I used AI to confirm my own thoughts on this matter - readers might like to do likewise.
As with all my posts — past, present and future — this is IMHO only. Opinion, not advice. Please DYOR before making any investment decisions.