Member Info for TakingMyTime

"Why are so many people fixated on a transaction all executives with options do at a point that best suits their own tax position!!! Leave GH and move on!"
Because most executives would exercise the options that expire sooner at a lower price, rather than the later expiring ones at a higher price. GH did the opposite. And the tax advantage of exercising the later expiring ones, even if the rules in Oz are the same as here, does not outweigh the higher price GH has to pay for them.

But that's my last word on it, even though there are things that have not been answered, because it's obvious this board in the main has no desire to explore it further. I'll do my own research.

Thanks for that, launder, very helpful!

@dodgemeister
"My 5 year old niece is better at joining dots than some of the hand-wringers on this board."

I'll try to explain this simply.
A. There is no hand-wringing.
B. No one has expressed any worries about the transaction. I didn't see any, anyway.

That is not the reason we are discussing it. The reasons:
1. Unless there's a tax reason, there's no obvious reason why he exercised that particular option.
2. Maybe I'm slow but the tax reason isn't particularly obvious to me.
3. There MIGHT be a reason for him to exercise that particular option if he thinks a hostile buyout attempt might be in the works and he wants a greater say.
4. If that is what is going on I would obviously like to increase our investment here.

It's not "worry". It's wondering if it is a clue to an opportunity I wouldn't want to miss. Obviously that's not the way you approach your investing, and that's fine. When I (or in this case my wife) invest in anything, I want to start learning absolutely everything I can about everything about it, and everything that happens. So far, it works pretty well for me. I realise not everyone is that way. Maybe there's a touch of OCD in me.

For me, I'm going to be looking into Oz tax rules on director share options and see if it makes more sense to me then. If it doesn't, I'll be thinking it was strategic rather than financial or tax-related, and will probably buy more shares now, rather than later, so I don't miss out on what might be coming soon.

Thanks, Paddy, good stuff.

Unless there's a second wave of the virus that keeps Primark shut longer. In which case the upward move may take longer / be slower.

But it's still coming. Just don't want anyone to be discouraged if it takes longer than expected, we're still on a winner here.

@VanV
"Merely a statement of some of the facts:"

All of those facts were present previously, yet we have either "a good old-fashioned pump" or something else going on. Those facts don't really shed any light on which it is, do they?

I'm all for him making lots more money than he already has! I suspect everyone here is. It's just that the way he did it seems strange, both in the timing of his share sell to finance it and the options he chose to exercise.

If he did it that way for tax purposes, then it's of no interest to us. If it was for strategic purposes, it could mean there's news coming!

There is no obvious reason why he exercised the option that expires next year, rather than the one that expires this year. If he had to sell shares to finance it, there is no obvious reason that he sold them now rather than a year from now when they will presumably be worth more.

When there is no obvious reason, there may be other reasons that are clues to the future. Because I think we can be pretty sure that he's not a stupid man, right? So there is SOME reason somewhere....

@Jerry
"I can’t see that he wants more votes as if there was a deal that he wanted to vote on he could immediately exercise all his options on one day, pay the premia and all done."
Well, one would think so. Unless he doesn't have the cash to do that and needs to sell some shares to do it. If that's the case, then he'd be selling shares to raise cash at a tricky time, I guess. But the price would presumably be better, and he'd just do it after the announcement was made.

"Maybe he is freeing up some space to give himself some more options?"
That would be interesting, for sure. Is there some kind of limitation on how many options he can have? There wouldn't normally be, I don't think. Admittedly not an expert on that kind of thing.

I'm guessing it is tax (not UK tax). Perhaps in Oz options are taxed at the point of exercise on the difference between market price and exercise price. If so, you would want to exercise when the market price is lower, potentially, if you expected market price to be going up. If someone is interested enough to research Oz tax rules on directors' equity options I promise to read what you post, LOL.

@JerrySpaniel
"Unless you have no shares and just want to exercise the options to sell the shares that have been exercised, there NO economic benefit to exercising early. (Assuming no weird local tax issues).
I am not an options guru really, but on this board I probably am."

So, why then do you think he exercised early? Seems like it's either weird local tax issues (in which case it is boring and has little import to us) or more votes. Struggling to come up with any other reason.

Best post of the day, without a doubt.

1plus1, good points all through. You may be right on the tax motivation, it would make sense.

@Paddy
"100% - he could have converted these in a couple of months when the SP is a lot higher and he would have had to sell a lot less to cover the costs - it's just like his director buy when we dropped last month, he is supremely confident where this is going and saying that to the MM's and the market - IMHO."

I'm not sure that's the way to look at it. If he's supremely confident, then he should wait until the SP is higher.

So why didn't he? I can think of maybe three possible reasons, there may be others.

1. He isn't confident about the interim share price. He may think this is the best it is likely to be for a while, or at least that there's a risk that we'll see prices drop for a while. That's a possibility, of course. The gold isn't coming out of the ground for a while. Maybe he saw short/medium term risk to the share price -- whilst obviously still having long-term belief. But this may have simply been reducing his risks by taking profit on some of his shares.

2. He has to be careful about insider trading so he can't sell when there's news he knows that hasn't been announced. So he had to plan his sale around the news schedule. But this was for options expiring a year from now, I'm sure he'd have had a chance in that time frame.

3. The options all vest on a change of control event -- but not when one is proposed. If he's concerned about a hostile takeover, the options wouldn't get a vote on that question, the shares would. Perhaps he wanted to convert those options to voting shares to increase his ability to fight off a possible hostile takeover.

Might be other reasons, those are the only ones I can think of. I think the SP is going higher in the short/medium term, but I suppose if I had as many shares as he has, I might be willing to reduce my risk by taking some profits now. He has a good few more profits to take in future if he wants, he's unlikely to regret this one too much even if the shares go to a pound, or ten pounds. How rich do you have to be?

@Plappers "The way he stuttered through that, did give me the impression that he already had a lender teed up on the debt finance side of things."

I wondered that, too. Almost as if he said he knew he could get debt finance and then realised he shouldn't say that and backtracked to make it sound not quite so certain. I'd guess nothing is agreed but that there have been very positive conversations and he pretty much knows it will be there.

Who wouldn't be willing to lend the money? There have to be multiple institutions looking at it and saying, once the MRE comes out, yeah, we'll put up money for that. If the MRE says what we think it will, it's going to be pretty secure lending.

Of course, it's possible that was all a bluff and he intends to sell to Newcrest. But it didn't strike me that way. Reading between the lines and guessing wildly, I think the plan is this:

1. If the MRE is not as good as currently expected, probably sell out to NC and start again at Scally.
2. If it is very good or great, as expected, agree the 5% with NC and use that and debt financing to go ahead and mine. Perhaps also use debt financing to start at Scally, or perhaps do another JV with NC there.

If NC comes in with an offer you can't refuse, either for Hav or for GGP in whole, that obviously changes the plan. I also think they want the SP higher so that NC knows that "an offer you can't refuse" is a whole gold mine full of money.

@Spy
"guys, just my view. not a dictation...forget about the complexity of calculations, what if, etc...dont waste your time on it, its out of our control anyway."

It's out of our control, but that's true with almost every investment a private investor makes. What-if scenarios / calculations help to clarify / reinforce the risk-reward dynamic of the investment. As more facts come in, the range of what-ifs narrows. It's entirely reasonable for investors who live by the DYOR motto to be exploring these things.

There's another kind of investor that does calculations, too. That's the kind that is just excited about what's happening and is having fun with it. It's like a cricket fan poring over the statistics to try to guess who will win the next test. It's just fun, if you have the time to do it. It's even more fun when the test has started and your team is winning, which is what seems to be happening here!

And both kinds may post their calculations here, perhaps because it is fun to do so, perhaps because they aren't sure they've got them right.

If someone is stressing over the calculations I hope they take your advice. But if someone is enjoying it, I enjoy seeing them. FWIW.

"'Yes, if NCM wants more. No, if Rio wants it.'

RIO swallows up NCM!"

It's more valuable to NCM, if it is lucrative, they will presumably be prepared to offer more than RIO.

NCM just might be able to fight off RIO, if Hav is as big as expected and Scal looks promising. If you owned NCM shares, and Hav is huge, and NCM/GGP were talking about another joint venture for Scal, would you be in a hurry to sell out to RIO? I wouldn't. The price would have to be very, very, very good....

"A second drop worries me here. A similar uptrend quickly dissipated end of April down from 2.50. Could happen again as the fundamentals haven't really changed. Sentiment can quickly evaporate!"

You are right. If I were a trader, it would worry me too. The only benefit of today's move to me is it got rid of some noise on this board.

Market moves don't matter to me. The only thing that matters is we get flying enough to stop the bleeding and start rebuilding a business. SP moves for me right now are just noise. I don't really care if it's at 150 or 250 at the end of the week, or the end of the year for that matter. What I care about is getting back to being a going concern. I can wait 10 years for the SP I want.

In the short term, and in this market, sentiment has all the staying power of a snowflake in hell.

"Maybe Mrs Tiggerman’s 75th is an omen regarding ggp sp??"

Well, it's not 0.75p or 7.5p. So, 75p tomorrow. You read it here first.

"TMT, I thought that you were going to answer your own question. The reason why they want the sp higher is that if someone wants to buy ggp they will have to pay a high price, and a higher price if the sp is itself higher at the start of the process. You won’t get 30p if the shares are trading at 9p. You might if they are trading at 18p."

That's one likely explanation. Other possibilities:

A) they are willing to sell their share of Hav to NCM, but don't want to sell the entire company. A higher SP helps convince NCM to "settle" for buying Hav alone.

B) Rio is on the prowl, they don't want to sell to them, so a higher SP makes the defence easier.

C) GH really, really likes my wife and since she bought in he wants her to make a lot of money.

D) some other reason I haven't thought of.

One of these is not like the others.

And the others, it seems to me, whichever one it is, are all good news for shareholders. The only way it would be bad new for shareholders is if actually they are starting to think Hav isn't that great after all, and they want to pump up the price and offload some of their own shares before word gets out. Since I don't think that's any more credible than C) above, I'm convinced that the recent emphasis on raising the share price is good news for long term holders.

NCM was at 12.29 on 13/3, they are at 19.89 now. That's up 60% in two months.

Hav is very, very big for a company the size of NCM, hugely profitable. It's beyond immense for a company like GGP. NCM has market cap of around £14Bn, GGP £300M. If NCM makes £1.5Bn out of Hav, that's great, it's about 10% of their market cap, a really, really nice boost. If GGP makes £500Mn out of Hav, it's more than their entire market cap.

It's like if I make £500K on an investment, it's life-changing. If Warren Buffet makes the same amount, he shrugs and says, 'That's nice.'

LOL, just checked and this is the worst performing share in my wife's and my portfolios today, and the one that has us the most excited.

A lot going on behind the scenes. There always is, for a company like this. You don't actually say that unless you want to pump the price. This interview was full of statements to pump up the price. Which fits what we saw last week, too.

Why are they trying to get the price higher? Not to issue more shares to raise capital. Surely not to sell their own shares. Not so private investors can cash out and take profits (that doesn't benefit the company particularly). So why?

Maybe they are just excited about the opportunity and how things are going, and want to spread the news. But that's not necessary for their investors, their investors are already excited. So what's the reason? If we knew that, we might know something important.