Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.

Teal Valley T.TV


Primary Symbol: P.TEAL

Teal is a Canadian, pharmaceutical & NHP manufacturer selling to Canada’s national, chain drug stores, presently expanding its portfolio to include cannabinoid-based products utilizing proprietary formulations & extractions for both the global Rx & recreational markets.


P.TEAL - Post by User

Comment by maldwynon Jan 23, 2022 10:06am
171 Views
Post# 34349649

RE:Exercise of warrants

RE:Exercise of warrantsI think it is a good question but difficult to know. Warrants are a lose-lose proposition for the company and existing shareholders after they are issued. If they expire worthless the company doesn't get the cash injection because its share perfprmace was too poor (ie just when it might need it), if on the other hand they are exercised because the share price exceeds the exercise price you are issuing equity at below what you could have on the open market so the process is unnecessarily dilutive. The only sweet spot is if the share price hovers just above exercise price and you more or less get market value for your shares.

I think a couple considerations would drive TV management's thinking on this. The first is how easily they could cover their financing needs entirely using debt. If they can do this on good terms then maybe they would prefer the warrants to lapse. The second consideration might be their  expected production rate, if they are going to increase it 10% (Caribou ?) then maybe a 10% increase in shares outstanding would be palatable. If it is going to decline 10% (no Santaner)
then it will be harder to how improving per share results with an increased float.

One other possibility is that TV management holds significant amounts of the warrants ( I haven't checked this) and has a vested interest in them being in the money.

So I don't really have an answer for you, but on balance I think it is unlikely the share price is being manipulated based on the warrants.

<< Previous
Bullboard Posts
Next >>