Shareholders may face a dilemma here — should they endure some potential near -
term share price volatility, (ideally) in return for a substantial increase in the company's (recurring) revenues & intrinsic value in the next few years?
The number of stock options and RSUs is determined by using the Binomial option pricing model and using the 180 - day trailing average stock price as a guide, which helps reduce the impact of short -
term share price volatility.
Not exact matches
Even if you sincerely believe a company isn't a value - trap, how long will you be comfortable staring a negative RoME in the face, while the
shares plumb new depths in
terms of
price &
volatility?
Remember, we're not buying and holding, we're speculating on the short
term volatility of a
share price.
The Ladies also look at timeliness (a prediction of how fast a stock's
price will grow compared to other stocks - stocks are given a number of 1 to 5, with one being the highest and the best); safety (the
volatility of a stock's
price around its own long
term trend); beta (the
volatility of a stock's
price relative to the total market) and upside - down ratios (the ratio between the projected potential gain per
share divided by the risk of loss per
share).
But I remain confident Record's current fundamentals (& subsequent technicals) will still propel the
share price significantly higher from here (with a potential significant long -
term AUME growth kicker if / when
volatility elevates & global macro / FX policies diverge more radically).