>If I recall rightly, there was a NR that disappeared (Macros was very good
>about giving us the URL on the missing NR). I think that was the NR where
>WSP said there was going to be 2.2 million extra options if they could get
>away with it.
The vanishing news release is the one announcing the re-pricing of the 2.2 million options approved Feb.10/97 - no extras.
>Then, the next thing some of those who got their proxies (not Surething
>or me, or presumably a lot of other US shareholders) found out was that
>the 2.2 turned into several million more. ( I'm still not clear on whether
>it was a total of 6 million shares or what, never having gotten my proxies-
>but it sure was a lot relative to the previous fully diluted number - 20%
>more some have said).
Not quite, at the EGM an Employee Incentive Option plan was approved
allowing the board to issue up to 4.5 million options - none have been
issued as yet that I'm aware of. If you or anyone else would like I can post
or email a summary of the contents of the proxy information.
>Why was it that WSP needed these extra options? To entice geologists to
>stay on board what some here believe is the best geology find since West
>Texas oil was discovered? It just doesn't make any sense to this threadster.
>6 million new shares at 80 cents per share is only about 3.4 million US
>dollars. Dilute the shares by 20% and gain $3.4 million in the company
>treasury. Doesn't sound like a very good deal for the people on this thread.
There are at present 2.2 million options from Feb.10/97 repriced to $1.62,
no others have been issued since, so the above figures are incorrect.
>If the winter program is a success, as Chris and some predict, all WSP
>would have to have done is waited a few months and they could have made
>a secondary offering at prices over $5, I would guess. To get $3.4 million
>US at $5Canadian per share would only require less than a million shares,
>instead of 6 milion shares. But I'm only looking from the point of view
>of shareholders who own the company, not the point of view or the
>Directors who want to make as much as they can while longsuffering SH
>experience huge "paper" losses. (There is no such thing as a paper loss!
>So says every market professional who has any credibility)
The primary purpose behind an option issue is to provide an incentive
to employees - not to provide capital, though that is a side benefit.
This mechanism has become grossly mis-used by corporations everywhere,
options are often granted to mislead the public as to the specific
remuneration directors and executives are receiving. This is now
commonplace on Wall Street, but always has been the case on the VSE.
As VSE companies go, Winspear has been one of the better ones I've seen
in terms of lack of insider selling (excepting Mr. Lucas), relatively
modest option issuance and well-organised fieldwork programs.
There are many possible reasons for the decline in share price since
the heady $3+ days, the most obvious being that there has been no pipe
found yet. I am well aware of the risk involved in investing in a diamond
exploration play, however I feel this risk is mitigated by the
fundamentals in this company - well financed, experienced professional
geological team, strong J.V. partner (Aber) and very promising geology -
diamonds found in till, boulders, dykes (not to mention pinks).
The next little while is liable to be fairly quite, unless there are some
surprises from the boulder analysis currently being done by Lakefield,
due, I believe, sometime in the next few weeks.
Cheers,
Kim
Disclaimer: I am a shareholder in Winspear Resources. I am not an
investment advisor and am offering my comments for discussion purposes
only. Do your own due diligence. |
