Management Options Granted:
The management has been granted options on Nov 21st at a strike price of 16 cents! See www.canadianinsider.com – symbol PDL. Management options are a form of compensation that shareholders pay for. I am concerned that the strike price (16 cents) is so close to the current price. It should be in the 25 to 30 cent range reflecting some risk on managements part. Management has done precious little to earn a bonus this year and the treasury can't fund it. They are hoping that the latest optimistic releases will get it up to maybe even 50 cents. If they can't get more financing at that point, they will cash in their options at a net profit, exercising at 16 cents and immediately selling at 50 cents. Assuming a market price of 50 cents per share, of 50-16 or 34 cents gain per share before tax. That's a gain of over $100,000 for a 300,000 option issue that purchasing shareholders pay for. The cashed in shares add to the shares issued total as well. In my mind that would be a sell signal. If they can score more financing, they will hold the shares hoping for maybe a dollar or more.
