Forum Archive Index - May 2000

["Ken Donelan" <kdonelan@ihug.co.nz>]

Nowhere in yesterday's announcement do Spectrum advise the exercise price of the options they intend to issue as part of their Rights & Bonus issue. In Jan 2000, when the first version of the rights issue was advised, the exercise price was quoted at 20c but at that time Spectrum's share price was around 40c as compared with today's 11.4c .

 

The new version of the rights issue is 7 new shares at 2c for every 3 existing shares. Based upon the current share price of 11.4c this gives an average price after the rights issue of 4.8c a share. If the exercise price of the options remain at 20c then the share price will have to increase by over 300% before the options will have any value. As the options are exercisable in less than 2 years this means that WEL Technology, and any other businesses that Spectrum may purchase, will have to produce some absolutely brilliant results to get the share price above 20c .