Big buyers in the open market at 29 cents?Can someone explain to me why anyone would buy a large number of shares today at 29 cents when they could contact the best-efforts offer Broker and get 1 share plus 0.5 option for the same 29 cents?
I have not done the option pricing calculation (nor can I spell Black-Scholes), but it seems to me the theoretical value of the shares in the offer is more like 26 cents, with the option worth about 3 cents. So anonymous is probably buying now to support the price at 29 cents so investors will contact the offering Broker and buy the units to get the warrant as sweetener. Then when the offering is closed, the stock price will drop to 26 cents. Right?
So why is anyone buying at 29 cents (except for anonymous)? Shouldn't they just wait a few weeks?