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Strategies & Market Trends : Stocks Crossing The 13 Week Moving Average <$10.01

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To: James Strauss who wrote (1330)5/7/1998 12:46:00 PM
From: Eric Maggard  Read Replies (1) of 13094
 
[Warrants]

With a stock that pays more than 1 to 1 it gets a little confusing. With the FCSE warrants you get 1.811 shares per warrant. So, that effectively reduces the cost of the stock down to around 3.75 or 6.75/1.811. Using your example: if you bought 1000 warrants, you would only have to pay out an additional $6,750 for 1811 shares (6.75 x 1000). If you bought the stock directly you would pay out (1811 x 3.94) = $7135.34. So, the warrants are fairly valued.

Hope that makes sense,

Eric
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