Re: Business decisions

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Connacher is a growing exploration, development and production company with a focus on producing bitumen and expanding its in-situ oil sands projects located near Fort McMurray, Alberta

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Longfellow

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Re: Business decisions

in response to

Re: Business decisions

jurek

posted on Mar 31, 2009 02:26PM

The big issue regarding the issue of options to acquire shares at a future date is the strike price; that is, the price which option holders would pay to get those shares.

Right now, if Connacher were to award options with a strike price of say $5.00, I would only cheer. To make any money the stock price would have to go considerably higher than that.

I suppose a company could award bonus shares outright if the stock price reaches a target level, but that would be a different animal. Even that would not be objectionable if the target level were high. I suppose the outright award of 2 million sh. Connacher when stock price reached $5.05 would have about the same dilution effect on other holders as award of $5 options (Holders would pay $10 million, or $0.05/common share outstanding, into the company to get them).