Cenovus Energy Inc T.CVE

"Time value" of the warrents = Leverage Offered

[RagingBull3]

Thanks Husky4000 for the following example explaining the "time value" portion of the warrents....   

"CVE goes up and up and up and let's say it trades at 25$ in 2022.  The warrants would be trading at 25 minus 6.54 + time value (around 2$), so around 20$  SO if you BUY the warrants today,  you will make 6 times your money, while buying the commons the commons you will make 3 times.  This is called leverage.  "

[SQCConsulting]

Yes a very good explanation but they appear better than they are. HSE sharelholders lost 22% of their common S vlaue in the transaction. The S price is roughly the same but you have 22% less shares and with the avergae value increasing about 40%. Sure a few warrants were thrown in but you will likley need much more than  6X profit to make up that huge loss. They are not free....the cost of

[Oasisjunior]

My point exactly...... everyone is making refrence to to getting the warrants for free, technically as explained we did pay when the transaction/conversion was completed...

[Husky4000]

I don't see it as losing anything.  The number of shares is not relevant. We get to be minority in something better more than 2 times better. For tax purposes, the cost of acquisition $ of a warrant is an interesting question.  So let's start with numbers.  For example someone bought 50000 HSE at 5$.  I end up with 39 225 CVE and 3255 warrants.  If you do 3255

[SQCConsulting]

I think most long term HSE holders were deep in red so its simply a question of perspective but yes from a vlue perspective you are indeed 100% correct.