RE: RE: RE: RE: Please jdstox - answer the kid r22yu.....quick summary....
A company usually issues Warrants/Options as incentives (either to employees or to those that participated in financings), as a carrot which will be "in the money" should the share price, exceed the price the warrant is excersizable at, it allows the holder of the warrant the right to buy shares at the set price (no matter what the current price of the stock is).
Example;
10,0000 Warrants excercizable at $0.45
Current Stock price is $0.80
Most people with warrants just hold onto them hoping the stock price goes way up (prior to the expiration of the warrants), then convert their warrants (exercise them....pay the set price per share), and the difference gain in share price is created instantly for them. In the above example, the holder would pay $0.45 per share to the company, get 10,000 shares which are immediatly worth $0.80 per share.
The more complicated use of warrants is to cover your shorts. Assuming you know what shorting means, an uncovered (naked-as in leaves you out there in the open) means you do not have warrants/options/shares of the stock at all, and if the stock price keeps going up (vs. down, which is what you bet), your losses could be infinite. However, if you owned warrants...at $0.45, you shorted the stock at $0.60.....and now the stock is at $0.80 (an uncovered short would have you losing $0.20 / share), however, with your warrant (your safety net), they can excercise the warrant to cover their short, essentially buying shares at $0.45 to cover their short(which was at $0.60).....so rather than losing $0.20 per share on a "bad" bet against the stock, they realize a $0.15/ share profit. As noted before, their profice would have been $0.35 / warrant/share, had they not bet against the share (and a loss of $.20 per share if they had shorted, without warrants).
hope that makes a bit more sense...i may have rambled. All i can say is this is one stock i would not be shorting (and if some people are ballsy enough too...i really reall hope they have warrants to cover it). jmo
Good certainty longs! (as i dont believe luck is needed imo;)