Does anyone have a feel (Travis) how significant the dilution Sandstorm metal just enacted? It looks like a flat give away to ”employees”. This really smells. Any thoughts are appreciated.
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Do you mean the options grant they just issued? Not terribly unusual, from my perspective — they have about 317 million shares outstanding, and this option grant is for about six million employee stock options and vests over (I think) five years, so that’s dilution of about 2%. I’m not particularly pleased that they did it when the price is so low, since that sets the exercise price of the options, but it’s not all that dilutive.
In my view, this is generous but reasonable compensation for employees of a startup company, since the success or failure of Sandstorm Metals will rely on the ability of this relatively small group of people to make good deals over the next few years. This level of option granting doesn’t stand out for me as a red flag, it’s higher than some companies but far lower than others.
Just FYI, Sandstorm Gold issued options last week according to their employee stock option plan as well — also five year term, though slightly less potential dilution in Gold’s case (5.7 million options, they have about 330 million shares outstanding). Still fairly reasonable in my view.