Bonus options and effect

[stuartw]

Hi
Anybody any experience with bonus options as in the current issue to MDX shareholders .
With such an apparently poorly performing company such as MDX is it fair to say if your a substantial holder such as myself the bonus option system amounts to flushing your cash down the loo ?
Basically the way i see it MDX shares have been difficult to sell and the Options will be more so , so allowing for the dilution effect the shares will become close to worthless. I guess the only saving grace maybe if MDX make a decent announcment and share value rises.
Anyhow enough ranting whats the general feeling with bonus options good or bad for the investor ?

 

[cuttlefish]

Hmmm ... I don't understand this stuff enough but will be curious to hear the opinions of others on it - my interpretation reading through it is (if you are an employee with 25c options that came with your current shares) that you'd effectively be paying 20c for an option with a strike price of 20c which doesn't make sense so I've misunderstood it. (only had a quick read of it).

 

[stuartw]

Surely someone must have experience with a similar situation - personally i think bonus options are a disgrace and completely destroy your holding value.
Before a company is given approval for bonus options they should be made to meet some performance criteria . Who decides if the company can place bonus options ?
They are only really a bonus in a well performed company in a struggling company they could be considered a anti bonus or more like a kick in the teeth to shareholders.
Now ive caught my breath again - hopefully im wrong about bonus options - surely someone has some experiences?

 

[cuttlefish]

The word bonus is subjective - so at the end of the day its all about the price at which the options are issued that will determine whether they actually are a 'bonus' or not.


The things that determine an option's value are:
* expiry date
* strike (exercise) price
* volatility of the underlying stock

What, as you understand it, is the offer in relation to the bonus options - how do you get them and how many do you get?

Also do you currently have shares? Or do you currently only have options? If you currently have options - what is the exercise price and the expiry date?