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[sharechat] Adultshop - ASC and ASCOA

From:	"G Stolwyk" <stolwyk@wave.co.nz>
Date:	Sat, 25 May 2002 13:42:46 +1200

Disclaimer: Outcomes may be different than projected. Readers are not asked to buy, hold or sell ASC or ASC options; to do so will be entirely at their own risk.

The following scenario is a fictitious one only. Transaction- and interest costs have been ignored.
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Let us have a look at ASC share price and the ASCOA option price; assume that the ASC share price is say $1.35 by 30/6/2004 (Conversion of ASCOA into shares at a cost of 20 cents).

Current ASC share price is 34.5 cents; assume it is 35 cents.

I am going to buy ASCOA options for that money; current price is 20 cents and I can buy 1.75 options.

Once the ASC share is $1.35, then the profit is 135-35= 100 cents or 285%.

The ASCO option price then will be (135-20)cents or 115 cents.

The profit will be: 1.75(115-20) cents= 166 cents or 831%.

Summary: Buy ASC shares, profit= 285%.
---------Buy ASCOA opt., profit = 831%.

Those are my opinions,

Gerry
The next and last exercise is to put a value on the ASC share and ASCOA option price on 30/6/2004, the date of conversion of these options to shares.

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