K5M Options

Posted on January 1, 2017

Description:

Reminder: There are 100,000 total shares of KmikeyM. At this time 9,450 have been sold to shareholders. Only shareholders may vote, so the majority of shares are non-voting. Every year there is a release of new shares…

Previously I’ve sold bulk purchases of new shares in an auction, but this year I want to sell options! This has a number of benefits, but here is how the options will work.

Each month I will sell options that give you the right, but not the obligation, to purchase a number of shares at a specified price on a set date in the future.

Example: I can create a 3-month option to buy 10 shares at $3.00. I'd sell you the option for $10.00 and in three months you could choose if you want to pay $30.00 for ten shares. If you include the price of the option contract you'd be spending $4.00 a share, which is below the current price of $4.61. And if the share price goes up it would be a better deal.

The benefits of releasing shares through options is I can set a schedule for the redemption period so there is a slow release during the year. This means the stock price won't dive from a sudden influx of new shares.

Additionally the options ensure shares only getting added to the voting pool when the stock is doing well. This benefits all shareholders by putting less downward pressure on the price. It’s also a benefit to the individual buying the option because they can limit their risk while maintaining an infinite upside. Fun!

This program will run for all of 2017. Each month I’ll put up for sale a number of options based on demand from the previous month, starting with 200 shares in January.


No - 62

UserShares
awmahan 💼☕️ 40
Azure Akamay ☕️ 20
edzillion 2

Past Discussion

davehayden ☕️💯 (156 shares, voted yes)
It's been 20 years since I looked at Black–Scholes, but I'm in.
hoytster (12 shares, voted yes)
$3? Is that the deal? That could be worth it.
GeneM 💯☕️ (140 shares, voted yes)
any plans to reinstate transaction fees?
egli (6 shares)
I really like the idea of options, but I wish there were a bit more detail in the proposal; some indication of the logic that will go into the size, premium, and strike price of the options that are offered. Will the options be auctioned off in some way or are they sold at predetermined values to the first taker? Is there a goal for how much fresh stock will be sold in 2017 that helps influence the options that get offered?
awmahan 💼☕️ (40 shares, voted no)
Only voted no to be a contrarian