RE: RE: Could we see a sky rocketWell, obviously she didn't skyrocket.
However, I share the sentiment that we have a high quality management team (anyone who doesn't know how high-grade Vermilion was (is) should read up on their story about which some of our team share the credit) and they will be able to make something from nothing.
However, one particular item intrigues me - the Insider Warrants. Yes, they'll also get a boatload of options, as per normal (6% to start, up to 10% allowed), but the 8m Insider Warrants tell a different story of relatively high confidence. They don't collect on them unless 2 things happen.
One, obviously is that they must remain with the company for the vesting periods (1/3 in 3 tranches over 24 months). Two, the share price must, within the 5-year life of the warrants, attain a proscribed 20-day average in order to trigger the warrants. That's the really interesting part as there is no way they'd have set those triggers at distantly unattainable levels. The trigger is
.40/warrant. If triggered, it grants a right to a treasury issued share at a price of $.30. Now, you could argue that it's self-serving to give themselves a warrant providing a future discounted share (by $.10/sh), and maybe that's so. However, the right to share in future upside while not having to put money up today costs them a 55% premium on today's share value. AND they will only be able to take advantage of this muted largesse if they move the company forward to a $.40 share price over a sustained period.
Furthermore, ArPetrol still has some outstanding 5-year performance warrants (5.4m that work the same way, except they only cost $.112/sh, but the trigger is based on a sustained trading value of, in one case, $.334 and in a second group, $.445).
All in all, if these guys can more than double today's share price in the next couple years, I'll be happy to see them trigger a relatively modest number of performance warrants (relative to the total share count, 13.4m out of 471m F.D., including warrants and options).
Food for thought.
Regards,
Naamkat