Post by
goldman777 on Mar 21, 2019 5:36pm
VERY IMPRESSED WITH DENNIS FONG - CFA
To help clarify the mis-understanding on this board I sent off an e-mail to IR @ 2:00 pm, Alberta time - had my response within 5 minutes. So let`s focus on the A warrants - pre conversion to Hexo. Question - If the common share price exceeds $1.00 does each A warrant still entitle me to buy one common share @ the strike price of $1.00. Answer - A warrant is a contract that allows the holder to buy common shares at the exercise price before expiry - so in this example your entitled to buy shares @ $1.00. Question - Example - common share price is $1.25, I have 100,000 A warrants, does this allow me to buy 100,000 common shares @ $1.00 - hence 25% below fair market value. Answer - Yes. Question - If the common share price goes to $2.00 and the A warrant is @ $1.00 and I choose to exercise my 100,000 do I effectively get 100,000 common shares for $1.00. Answer - Yes, the cost of your exercise would be $1.00 x 100,000 = $100,000, and you could then sell for $200,000 making a $100,000 profit. I had a few more questions to which his answers were concise and to point, those I will keep for myself. It should be noted that when a company raises money in a public offering, they only receive money for the shares , the warrants are a sweetener to the participants in the offering to make the deal more attractive - they do not contribute cash to the company until they get exercised into common shares. If the common share is worth $5.00, you still get 1 x $5.00 common share for every A warrant you hold. Every A warrant you hold entitles you to buy 1 x common share @ $1.00 regardless of what the common share price is, could be $5.00, could be $10.00. The fact that they are free trading was at the companies discretion, all warrants are not free trading. I would like to thank Dennis for his response...basically every A warrant you own will allow you to buy one common share for $1.00 ( the strike price ) regardless of what the common share is trading at - THE "A" WARRANTS ARE AN OBVIOUS BUY HERE.
Comment by
silkroad007 on Mar 21, 2019 7:31pm
You are correct but im shocked this wasn't obvious to you already, that literally is the definition of a warrant. I wonder how many times IR gets this question.
Comment by
silkroad007 on Mar 21, 2019 8:24pm
Fair enough Quinlash - just hard for long time holders to see - correct info posted - wrong info posted - people wanting handouts - and the usual mis leading posters....rinse and repeat every 3 days I just wish people would slow down and actually think for a moment, perhaps google and stop spamming this like a facebook thread.
Comment by
quinlash on Mar 21, 2019 8:39pm
Oh I hear ya... the ignore button is a wonderful tool though ;) I just remember back when I was new, made loads of mistakes, would give my left walnut for someone to have nudged me slightly out of the way of the speeding train... lol.. anyhow, have a great weekend
Comment by
flyboy27 on Mar 21, 2019 9:33pm
---Silk....there are many new investors currently, They may not be aware of the the warrant and its usefulness as a trading or investment vehicle.. this new combination of HIP and HEXO is a very promising investment , to say the least... IMO
Comment by
MarkMuller1 on Mar 21, 2019 8:18pm
Wow so you basically just bombarded him with questions about how warrants work in general? jeez man. Could have read all that on google, should have asked him questions about convertions etc