Canoe EIT Income 4.80 Cumulative Redeemable Pref shs Series 1 T.EIT.PR.A

RE: Enervest Warrants

[OptsyEagle]

The problem with them is that June call option that Enervest has.  The way I see it is if the stock keeps rising between now and June, so would the warrants.  Right now they are around
.35 each.  If the stock goes to $13.31, the warrants, should add another
.25 at least.  So now you have a stock trading slightly above $13.31 and warrants worth
.60 each.

Now as soon as the stock trades at $13.31 for 10 days and June 23 passes, you will, without question, get the call option exercised and presto, the next day the warrants, that should be trading at around
.60, are now worthless.

Since I am not the only one that knows this, as we get closer to June 23rd the time value of the warrants will take that price from my theoretical
.60 and drop it closer to the zero level as we approach that date.  This is all provided the stock trades above $13.31.  If it doesn't it will go close to zero before that date.

Now if it trades above $13.31, plus whatever you paid for the warrants, by June 23rd, then yes you will at least break even and of course start to make some real money if the stock continues to rise.  Anyway, I just found that call option quite annoying and because of it, the warrants always seemed to trade at a price higher than what I would have paid for them.  But of course, I have been known to be quite cheap.

Good luck to you.