Warrants leverage vs. common stock | Common Stock | Symbol | Current Price | Projected Price | | |
| Maple Gold | | $0.24 | $1.00 | $5.00 | $10.00 |
| Symbol | MGM | | | | |
| Profit | | | $0.76 | $4.76 | $9.76 |
| ROI % | | | 317% | 1983% | 4067% |
| | | | | | |
| Warrant | | | | | |
| Expiration Date | MGM.wt | Jun 27, 2022 | | | |
| Exercise price | $0.40 | | | | |
| Warrant Price | $0.08 | | | | |
| Intrinsic (Minimum) Value | | | $0.60 | $4.60 | $9.60 |
| Profit on Warrant | | | $0.52 | $4.52 | $9.52 |
| ROI % | | | 650% | 5650% | 11900% |
| Leverage | | | 2.1 | 2.8 | 2.9 |
| | | | | | |
| shares | 10000 | | $6,000 | $46,000 | $96,000 |
| cost | $800.00 | | | | |
I've posted the above table to illustrate the leverage advantage the warrant has over the common stock.
In my example someone buys 10,000 warrants for $.08 at a cost of $800.
I've used future prices of the common stock at $1, $5, and $10.
If the common stock goes to $5.00 before expiry in 2022, the warrants have a minimum value of $4.60.
The return on investment for the common is 1983%
The ROI on the warrant is 5650% giving a leverage advantage of 2.8 (5680/1983)
Your $800 investment in the warrant becomes becomes $46,000.
If you invested the $800 in common shares at $0.24 you get 3333 shares and at $5.00 you would have $16,665.
Hope this info is informative to some.
Cheers,
BG3