RE:Can anyone explain this ?OHHHH FARTS....
Read the Final Prospectus!!
PLEASE SEE BELOW MY COMMENTS IN CAPS AND
HIGHLIGHTS 321Blastoff wrote: Apologies in advance this is a somewhat long but hopefully thought provoking post.
In February of this year (3 months ago) Newstrike completes a bought financing deal with a group of underwriters who purchase @ 73 million units at $1.32 raising somewhere in the area of @ $100 million. Each unit purchased consists of 1 common share and 1 warrant with an exercise price of $1.75 and expiry of Feb 2020.
***NO, THE OFFERED UNITS WERE 60,610,00 @ $1.32 = $80,005,200
*** PLUS OPTION ISSUABLE TO THE UNDERWRITERES = 13,273,590 (OFFERED UNITS)
*** READ THE PROSPECTUS FOR MORE INFO***
Almost imediately after which HIP.WT becomes available at .07 per warrant on the TSXV.
***** YUP
************An investment in the securities offered hereunder is speculative and involves a high degree of risk. The risk
factors identified under the heading “Risk Factors” in this short form prospectus should be carefully reviewed and evaluated by prospective purchasers before purchasing the securities being offered hereunder. The Corporation has received conditional acceptance from the TSXV to list the Unit Shares, the Warrant Shares and the Common Shares underlying the Compensation Warrants (including the Common Shares issuable upon exercise of the Warrants underlying the Compensation Warrants) on the TSXV. The Corporation has also applied to list the Warrants on the TSXV. Listing will be subject to the Corporation fulfilling all of the listing requirements of the TSXV. There is currently no market through which the Warrants may be sold.
SO:
The underwriters immediately opt to sell the warrants they received as part of the bought deal ?
Why ? Virtually no time has elapsed and the warrants could prove to be incredibly profitable for them if they just hold them until they are in the money.
******NOPE
Or else where do these HIP.WT warrants come from ?
I can only assume that the warrants are the very same from the bought deal and the underwriters have held onto the majority and we are seeing a very small fraction of those warrants being passed around among the public. Who knows, maybe when the price of HIP.WT was @ .23 the underwriters let go of some more warrants and made a few dollars to offset their inital investments. It is all highly speculative and there could many other scenarios I suppose.
******DEAR GOD, PLEASE READ THE PROSPECTUS
So let's agree that the warrants are the same from the bought deal. Why does Newstrike choose to list the warrants in the first place. They will not benefit financially will they ? The warrants have been granted to the underwriters and I assume have become their financial property. So then this listing must be at the request of the underwriters ?
****REALLY? ARE THEY THE SAME WARRANTS....OMG. DID YOU JUST FIGURE THAT OUT.
************AGAIN...................**********An investment in the securities offered hereunder is speculative and involves a high degree of risk. The risk
factors identified under the heading “Risk Factors” in this short form prospectus should be carefully reviewed and evaluated by prospective purchasers before purchasing the securities being offered hereunder. The Corporation has received conditional acceptance from the TSXV to list the Unit Shares, the Warrant Shares and the Common Shares underlying the Compensation Warrants (including the Common Shares issuable upon exercise of the Warrants underlying the Compensation Warrants) on the TSXV. The Corporation has also applied to list the Warrants on the TSXV. Listing will be subject to the Corporation fulfilling all of the listing requirements of the TSXV. There is currently no market through which the Warrants may be sold.
As a public shareholder we are suddenly let in on the possibility of an option which was previously only for insiders. The deal seems pretty good too ! The strike price is not scarily far from the share price at the time of issue and there are 2 full years for it to be in the money. So we buy our warrants.
How does our purchase affect the financial bottom line of the company if the warrants are the property of the underwriters ? In fact if the price is to suddenly surge above $3 and remain for over 10 days the company has the option to call an early end to the life of the warrant.
*****$2.60 FOR 10 CONSEC. DAYS DOES NOT END THE LIFE OF THE WARRANT BUT ALLOWS THE COMPANY TO FORCE EXCERCISE. AGAIN....IF YOU READ THE OTHER DOCUMENT ON SEDAR:
REGARDS TO YOUR BOTTOM LINE QUESTION....TO EXERCISE THE WARRANTS YOU MUST SEND:
A CERTIFIED CHEQUE, BANK DRAFT OR MONEY ORDER IN LAWFUL MONEY OF cANADA PAYABLE TO THE ORDER OF THE CORPORTATION. SEEMS LIKE THE WARRANTS ARE NOT THE PROPERTY OF THE UNDERWRITERS
“Corporation” means Newstrike Resources Ltd. and includes any Successor Corporation
to or of Newstrike Resources Ltd. which has complied with the provisions of Article 8;
So if the ratio of a consolidation is say 5:1 and the share price reacts accordingly the warrants are in peril of becoming obsolete if the company utilizes their option which in turn forces the hand of the shareholder to exercise the warrant. This infuses the company with more money but most likely only momentarily as people exercise their warrant and then cash out selling the shares they have just received. Remember those who have 100,000 warrants will need access to $175,000 in funds to exercise the warrants. After which they will have made a tidy profit of $3.25 per unit. It seems to me that anyone with any sense will just turn that around and become liquid again.
*****WHAT!!!!????? IT'S A ZERO SUM GAME IF THERE IS A REVERSE SPLIT. IF YOU OWN 100,000 WARRANTS AND IT IS A 5:1 SPLIT. YOU NOW OWN 20,000 WARRANTS. THE STRIKE PRICE IS NOW $1.75 X 5 = $8.75.
*****PLEASE READ THE DOCUMENTS AVAILABLE TO YOU ON SEDAR!!!
So my fear is that at best the share price will be falsely increased and for only a very short period after which it drops back to where it was and we hold one fifth of the shares we had before.
***** IT IS A ZERO SUM GAME RIGHT OFF THE HOP. THE SHARE PRICE IS NOT BEING "FALSELY" INCREASED. YES, THERE IS A DANGER THAT THE STOCK PRICE COULD STILL GO DOWN AFTER THE SPLIT. GOOGLE IT, THERE ARE CASES WHERE IT WORKED OUT VERY WELL FOR THE COMPANY.
YOU EITHER HAVE:
483,389,185 COMMON SHARES TRADING @ $.90 OR IN A 5:1 SPLIT
96,677,837 COMMON SHARES TRADING @ $4.50
483,389,185 X $0.90 = $ 435,050,266.50
96,677,837 X $4.50 = $ 435,050,266.50
So what does consolidation really promise ? Of course I suppose there are other possibilities but this is the one that has me very concerned. It would therefore be prudent in my opinion to wait and see how the share price simply reacts to the financials I had hoped for from the company in the first place.
*****MY DEAR SWEET FRIEND, I HOPE THIS FINDS YOU WELL AND IS HELPFUL FOR YOU. PLEASE DON'T TAKE MY ALL CAPS AS YELLING, JUST TRYING TO SEPERATE MY TEXT FROM YOURS. I HOPE YOU HAVE A WONDERFUL WEEKEND AND I WISH YOU THE BEST OF LUCK.
We are in a good place. Why shake things up ?
*** THERE ARE MANY ARTICLES ON THE INTERNET ABOUT REVERSE SPLITS, IT ISN'T ALWAYS A BAD THING. GOOGLE IS YOUR FRIEND
IN MY RECOMENDATION FOR YOU TO SEEK A PRO IN MY PREVIOUS POST, I WASN'T REFERING TO A BROKER. PERHAPS A "FEE FOR SERVICE ADVISOR" OR MAYBE A LAWYER TO HELP YOU UNDERSTAND THE DOCUMENTS THAT ARE EASILY OBTAINED ON SEDAR.
REMEMBER ....
An investment in the securities offered hereunder is speculative and involves a high degree of risk. The risk factors identified under the heading “Risk Factors” in this short form prospectus should be carefully reviewed and evaluated by prospective purchasers before purchasing the securities being offered hereunder