Warrants & market failureThanks to whoever sold me 10,000 warrants yesterday at 21 cents.
I was kicking myself for not buying when they were down to 10 cents earlier in the week. I attended the meeting on the spin off earlier this week and got a good sense this project will continue to produce news and show movement over the next year. I believe that with market volatility and forthcoming news there is a very good chance I will be selling my warrants for at least 50 cents by year end (or buying more for 10 cents).
The WRN warrants have an excise at $3.45. So right now, the spot price (=$2.10) is about 39% out of the money.
Call Options on CUM (Spot = $5) that are 39% out of the money would be the $8 call.
The CUM Apr2012 call for $8 is trading for between 35 and 60 cents.
Call option on AZC (another favorite of mine with Spot = $3.50) that are 39% out of the money would be about the $6 Call which last traded for 45 cents according to CIBC INvestors Edge (the best stock trading site by the way....TD sucks).
Anyway, since the WRN warrants, which expire next November, are substantially cheaper than comparable CUm and AZC options that expire next April (21 cents < 40 cent average for those two) I think I'm making a good bet.
I realize that CUm and AZC are closer to production, but I also think their share prices have risen significantly in the past week while WRN is laying low. I firmly believe this will be an $18 stock in 5-10 years once CASINO is up and running. Any thoughts from those with a Finance background?