RE: Mr. 21- M. GilddyHi Mr. Gilldy....things are a little slow this am so here's a long winded reply others, maybe even you, may wish to skip...lol....
You're clearly more forgiving than me/most: even some of the most ardent IPT fans were critical of the move. (I’ll assume for present purposes you were not just a beneficiary of the re-pricing...lol)
"It takes money to run a good company and individuals have to be paid. You can pay them in cash or you can sometimes pay them in shares or options, whatever makes more sense - but you have to pay."
This is true, but it’s also trite and not really on point. I have no issue with a company that pays its people well; it’s actually, imo, a strategic imperative in the resource game as there’s reported to be a chronic shortage of certain skill sets. But that’s not the point anyone was debating.
The issue was not IF you pay people, or even HOW MUCH you pay them, per se...the issue was a decision by management to unilaterally exercise a fully discretionary authority to RETROACTIVELY CHANGE that compensation formula midstream for no good reason and to the detriment of existing shareholders...more fully, whether such action is consistent with the ‘good management” parameter for being involved in a resource play like this to begin with and sticking with it over the longer term.
As I should know there is no free lunch; you should also appreciate that the true beneficiaries of the move will likely be a handful of inside people, not the pick and shovel folks, so lets not kid ourselves that it was some thoughtful and company wide HR exercise to reward/retain a bunch of people who were heading for the door because the market dropped for a week last month. Second, most seem to have concurred that the compensation for IPT’s management was quite good compared to peers, if not in excess thereof. Third, the market decline would, presumably, affect all players in a similar way....so why did IPT have re-price to keep people when lots of folks all around them did not?...
So now, a mere couple of weeks later, you get good news released from the company, the fed reinvigorating at least for now the equity markets in general, the PM sector beginning to take off....all in all looks pretty good right....so how has IPT changed significantly from when the pricing of those options was originally negotiated?...how is it materially different (in a negative re-pricing way) than, oh say three months ago?...not at all, really, other than an intermittent market dip occurred and now these guys will be able to exercise and dump shares on the market at newly lower prices....they took advantage just as quickly as they could to our detriment and as I said in my original post, they were the only people in my holdings and the other 30 or so plays I watch to do this...the rationalization that this is routine, everyone does it, grin and bear it, is simply not the case and, I believe, a precarious way to assess management teams.
"The BOSS says how much and you have to trust the BOSS cause otherwise you bought the wrong stock."
My caveat is that when the boss tells a shareholder how much he will pay himself and his people...but then exercises a discretionary authority to re-price the compensation formula (re: shares at least) thereby making it harder for that shareholder who bought in based on the managements representations/existing option pricing...in my view for no other reason than to nakedly take advantage of a short term market blip for his sole advantage?...well then I agree...I bought the wrong stock for my investing rules/parameters....
I don’t “trust” Fred Davidson....I don’t know him, never met him and likely never will...neither have most of the retail share holders in this or any other junior play....most will never visit the business in Mexico or look him or his people in the eye.....trust for your money has a place among friends, family and perhaps close business partners....it is misplaced and too often ceded between retail shareholders and the management of their penny resource stocks operating in foreign lands and trading on the infamous venture exchange in the infamous mining sector for goodness sakes...do you really think Fred cares about someone who owns a few thousand shares in IPT or that any such concern dictates his decision making?...I think you just saw proof to the contrary....my ego is not so large...so my view/approach is that I own a relatively small (insignificant in the bigger picture) amount of shares in a public company he runs and what matters to me is how he runs the company and if he prejudices me as a shareholder by further lining his own pockets ahead of me for no good reason....this is not a matter of trust...rather a matter of factually, what did he say he’d do, what did he do, is it different than he said, and if so, why is that.
"Reminds me of the way your wife probably spends money. She can either ask you for cash and then go buy something with the cash, or she can put it on the charge card and you pay at the end of the month when you get the bill. EITHER WAY, YOU PAY. She buys YOU PAY! LOL."
My reference to trading the wife was tongue in check, as I’m not married, and I suspect you were mostly having fun with that. You’re definitely correct, though, that this is a common pattern...which is not the same thing as an intelligent, rational, or prudent pattern! In fact, it’s a pattern that no doubt contributes to the more than 50% divorce rate in North America. Research clearly shows that THE overwhelming leading cause of divorce is financial strain/disagreement...the other most oft cited causes are really symptoms of that underlying issue. It’s the pattern you describe that gets most people to the divorce lawyer....more than 50% of ‘em...and Lord knows the other 50% ain’t exactly all happy!...lol...this is perhaps why someone like 21 can point to your logic being specious....the strategy you anaolgize in marriage is a recipe for failure for most unions and we happen to think it is for stock selection too...but hey....everyone can make their own bed to lie in so to speak!...and we all have our unique tolerances for being taken advantage of.
IPT, as I said, is a promising play, and I suspect will do ok for its shareholders in the long run...who really knows...no one here, that’s for sure....all people like me and 21 are saying is that if we had to choose between two great looking women, but one was going to go out to the bar once a year and bag herself a one nighter....well, you can have that one and we’ll likely pass, thanks....she may look great and be great to you the rest of the year, but now and then when it matters most, she’s going to hurt you....I’ll take the one who’s moral compass is a little straighter thanks, even if she ain’t quite as “pretty”....same with a stock...I’d rather a management that shows its commitment to protecting the interests of ALL shareholder’s value....not one that prejudices some of us by precipitously capitalizing on some opportunity to put themselves ahead of the rest of us....
So, my friend, here’s an old saying that you must have learned by now... the best predictor of future behaviour is past behaviour....keep that one in mind if you remain in the stock.
This is my last word on the options thing....I said my piece on it and I am not one to be bashing stocks....as much as I meant it, I also meant sincerely that I wish those who remain are treated well by the company, its management and its share price.
With never-knotted knickers;
regards;