International Precious Metals (IPMCF) Message Board

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Gold/Mining/Energy : International Precious Metals (IPMCF)

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To: Mark Bartlett who wrote (1689)	1/26/1997 11:04:00 PM
From: Amit Ghate	of 35569

>Well yes ... the dollar has (in the case of IPM) been paid ... but you have to include that with the exercise price cost to determine if you are getting value in the transaction .... it is the sum of these 2 costs that determine your total cost per share.< Mark, The problem here is with what is the transaction. For tax purposes you might consider the cost of the warrant and the exercise cost together, but in terms of the decision that an existing warrant holder faces now, it is simply whether to exercise or not. And that decision depends only on if the shares are >$2.83. If you want, consider an example of the shares trading at $3.50. If the warrant holder decides, as I understand your position, to not exercise, he has spent $1 on a worthless (i.e. unexercised) warrant for a total loss of $1 per warrant. If on the other hand he exercises the warrant, then the loss is $1 for warrant - ($3.50 - 2.83) = $0.33. Now of course he'd rather not lose anything, but given the two choices of exercising or not, he'll exercise to minimize his loss. Hope this helps, Amit

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