RE:RE:RE:RE:fund strategy going forward? warrants have to be far enough in the money to make such a transaction tax neutral. When selling shares to exercise warrants, a taxable gain is triggered. The share price has to be far enough over the warrant exercise price to cover tax on capital gain and transaction costs.
leewebbfan54 wrote: Teevee, how much in the money do you think is required for warrants to be exercised?
I imagine most of the warrant holders also own shares. In the days leading up to expiration, don't you think they would sell underlying shares above 65c, then exercise the 65c warrants? Even if it's only a fews cents in the money?
Anyone have experience or observed the exercise behaviour of near-the-money warrants?
teevee wrote: My only comment is that I would expect the warrants would have to be deep in the money to get exercised. For that to happen, the funds will have to co-operate. I can't see the company extending the expiration dates as they are just a free ride built into a previous financing.
GuyInPhoenix wrote: teevee...
I have seen a number of examples of companies extending the expiration dates for warrants.
Anyone want to venture a guess as to the odds for that here? I personally have no idea
teevee wrote: I expect fund mangers will deliberately suppress the share price to near or below warrant exercise price, trying to force a financing on their terms and priced below their average cost of sale, gaining yet more control over managment decisions. The way to avoid this is to buy when they pound the price, and wait for a major to step up on a takeover or development deal.