Katanga Mining Ltd Ord KATFF

RE: RE: RE: RE: RE: i just bought 20,000 kat.wt

[Kooler]

Let's say Glencore decided to own 100% of KAT instead of the 80-90% they currently owned and offer a HUGE premium, for argument sake say $8.50, to buy out the minority shareholders. Now, explain to me why Glencore would buy back the warrants which are now worthless.

Warrants in general commands a higher premium because of its leveraging power. But not all warrants are created equally.  This all depends on the intrinsic value of the warrants. You would want to play warrants where the common shares trade at a price that is close to the exercise price or has the opportunity to close in on the exercise price because of a decent expiry date. As the sp rise and approach the exercise price, the warrants are going to take off  much more than the common shares. 

I have made good money on warrants and have also lose HUGE on warrants by not doing my proper DD. I think KAT warrants are HUGE risk with some potential of doubling or tripling your money by trading them. The HUGE risk is because Glencore can suddenly offer to take out KAT and cause the warrants would be worthless.