Sandstorm Metals & Energy Ltd STTYF

RE: RE: SND Warrants

[zentrarianNZ]

Comments?...

A good case can be made that when a company starts extending its warrants, it increases their perceived future value prior to issuance - thereby decreasing the value of other claims on the company's cash flow. This is one reason among many why regular shareholders generally frown on extensions. OTOH, some studies have shown that the market tends to respond favorably to warrant extensions, presumably because it interprets the move as an indication that management is optimistic about hitting the target price, which of course is good for everybody.

I don't think there's a one-size-fits-all answer to the question of warrant extensions. It depends on the circumstances. FWIW, my own view is that management shows greater integrity by sticking to the game plan and not "moving the goal posts" in the final quarter - especially now that IR has specifically stated it would not extend.