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.
