TSXV:VER.H - Post by User
Comment by
gaserx2on Aug 15, 2012 1:18am
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Post# 20218544
RE: RE: Warrants and Options
RE: RE: Warrants and Options Sure exercising warrants will add to the total number of outstanding shares. However you must consider this. When the warrant holder exercises, and takes delivery of his shares, lets say he has an option to buy at a price of .50 cents and the expiry date is 18 months from now. He will take delivery of his shares at .50 cents and 18 months from now I would take a guess and have to be optimistic enough to say that the share price will be much higher than .50 cents. So the end result is that he takes delivery at a very low price and realizes a nice profit based on the S/P 18 months out,
EG. If the stock moves up to $1.50 in 18 months he will realize a nice capital gain of $1.00/share.
So my question to you is why would the warrant holders sell at .50 cents when they could sell at $1.50 or more?
As for the market valuing the company at $30 million, that may be the case today, however with future revenues in the not to distant future I confidently would have to say that the market very well could value the company at $150 million. An extra 20 million shares added to the mix would be rather insignificant not long after the initial increase in the O/S in my opinion.
Gaser