The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Colintrade, obviously I can't prove that I have but I have spoken to Alessandro and Paul on several occasions and the last exchange was to clear the call option confusion up. (I have already posted it on here).
The option price written by the II has given AZ the right to buy the shares at a much higher price. The £1.1m has already been paid by OG and the price that OG will pay for the shares (if the SP is at 0.6945 or higher) is 0.6945.
Hence why he needs the SP to be circa 0.86 for this to have been worthwhile.
It amazes me that people are honestly trying to say that an II is going to give away 630m shares for £1.1m. That's 0.0017.
This is just something that happens and is AZ trying to show he is putting money where his mouth is.
The II has given AZ the right to buy their shares but only at a much higher price than the prevailing market price so it's win, win for them.
I find it amazing this is the one thing that keeps coming back up.
Just watching L2 and there's been several 250k share buys going through (I think 7 that I've seen).
Are these big buys the norm for this share or someone with deep pockets looking to make a (hopefully) quick buck?
Obviously last time round the SP was climbing and climbing in anticipation. This time round, is everyone just under the assumption we're not getting anything good tomorrow other than a 'we expect to have a revenue of X'?
I was hoping for an rns tomorrow morning with something like an agreement/order with Carnival or similar but I guess I was being a bit too hopeful.
Ah. Thank you Fiisch.
So simple terms, AZ has a bet with a broker that the share price will be over 0.69 on the 31st.
Would said broker be the one holding these 630m shares or would the £1.1m 'fee' just be for the broker to transfer from one of AZ's other companies to OG?
What I'm getting at is he has nothing at stake here does he. If the SP is at 0.3 on the 31st, the option just disappears and if he was so inclined, he'd just buy/transfer them at the current price.
I'm just trying to get to grips with this as people keep seeing it as a guarantee that the SP will be over 0.69 but I don't see it.
Also, why £1.1m? Where does that figure come from?
https://youtube.com/watch?ab_channel=DinisGuarda&v=fR1LTvz-_Rg