Hi Oldwiser, Great example as i hadn't seen it before, it was a...

Hi Oldwiser,

Great example as i hadn't seen it before, it was a good deal for the underwriter in that circumstance as 88E had plenty of capital available, the options were already in the money and had been for a while.

At the time the deal was signed the SP was at 2.7c and they were getting a 4.5% discount to the conversion price giving the underwriter a potential 34% upside. by the the time the options were converted the SP was at 3c meaning the underwriter made 44% assuming they were able to unload them at 3c.

I dont believe we would have been able to broker a deal like that given we may have needed capital prior to the option expiry, the SP had only briefly touched 12c recently and as such why would the underwriter take on that risk?