FDR and the March warrant expiry mathThanks, EatMore - I keep forgetting about those warrants. An interesting question to ponder. I suspect their expiry event will be another proof of the strength of Founders.
At today’s FDR prices, assuming worst case scenario (that no remaining warrant holders want to commit any new cash), we could see roughly 650,000 shares get dumped onto the market around expiry 2-3 months from now.
But by then, we might already be at $7 or $8 – or more. Meaning less than 500,000 shares coming available. And were FDR such a self-evidently hot stock at that point, probably not every warrant holder would want to finance his exercise through selling FDR shares.
Whatever warrant-exercise shares remained to come free might be gobbled up by institutions or HNW retail anyways. In a single day of trading perhaps. Or even a single hour.
All of those above numbers assume no one has shorted against his warrants so far. If that has already happened to a material extent, our stock price appreciation might not even slow down on expiry day.
Hard not to love this stock and its management’s evident commitment to keeping share issuance low. Times like these are when the payoff of such a miserly approach becomes obvious.
I figured there would be news by now about drill results or other good things, but it’s easy to be patient when our chart looks as dominant as it does lately. I’ll save my extended commentary for the next press release or management interview.
Now back to watching the ticker.