Exit strategy for my Erin Ventures holdings
I thought this exercise could be interesting and fun.
Exit strategy for my Erin Ventures holdings
Total EV holdings: X shares + Y warrants
Core EV position to hold until I unload my final position (i.e. 2nd exit point): Z shares
Excess EV holdings to be sold at the 1st exit point: X shares + Y warrants - Z shares
My core position is a fixed number of EV shares (no warrants) and it is what I plan to hold until I unload my remaining EV position. These shares will be sold at some point in the distant future for several dollars per share. These are what I call my "free" shares.
My excess holdings include everything above and beyond my core position. This includes all EV shares and warrants above the number of shares in my core EV position.
I have a target $$$ amount for the total proceeds (after tax) on the sale of my "excess EV holdings" at my 1st exit point. This target amount includes my principal investment capital and a very healthy profit (after tax).
Basically, "excess holdings" x share price = Target net proceeds (after tax)
In November 2015, the required share price for my 1st exit point was $2.12 per share to reach my target net proceeds.
In December 2015, after further accumulation, the required share price of my 1st exit point was $1.03 per share to reach my target net proceeds.
In February 2016, if I accumulate more shares and warrants, my new target price could be anywhere from $0.70 per share to as low as $0.40 per per share (or lower). I'm just trying to figure out how many more shares (and warrants) I want to accumulate.
No matter what happens, my core position will remain fixed and as I add to my total position, my "excess" holdings increase, thereby decreasing the share price that I require to achieve my target net proceeds.
That's basically it. I'm planning to sell my EV holdings in two parts. The first part fluctuates depending on my total holdings and the 2nd part remains fixed. As my EV holdings increase, the share price required for my 1st exit point decreases.
Then I buy my next stock(s) in either Graphite, Lithium, Technology or any combination of the three.
I'm curious to know what others have planned for their exit strategy.
Several of my friends have been accumulating significantly recently with a similar strategy. Buy more with a goal to sell some early (to cover their initial capital investment and earn a nice little profit) and let the rest ride.
Cheers,
VB