RE:RE:RE:RE:DEAR: Mr. CONTRARIAN !!!Chrysler example:
$30 stock price - $13 exercise price = $17 intrinsic value/wt
$17 X 14.4m wts = $244.80m (forgone opportunity because stock was issued at $13 rather than $30)
$13 X 14.4m wts = $187.20m cash in to company on warrant exercise
$244.80 - $187.20 = $57.60 net lost opportunity
*However, the new denominator (number of shares outstanding) also means that shareholders would share the pie of all future cash flows.
With Sherritt the bet would be - does the share price exceed the warrant exercise price before expiry (i.e. in the next two years). If it does, we have dilution. If it does not, they expiry worthless. Might not be a bad use of a small amount of cash to buy in as many warrants as possible to eliminate the "potential" for dilution in the event a more constructive nickel price environement becomes to pass.