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Strategies & Market Trends : Ride the Tiger with CD
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To: Canuck Dave who wrote (209051)1/6/2012 1:50:30 PM
From: stuffbug  Read Replies (1) of 312983
 
CKG - Could be a fund with a ton of warrants selling stock so they have the cash to exercise the warrants.

If the fund pays the manager a 20% performance fee, the manager could be looking to lock in a profit.
For example, sell 300,000 shares at $10 (3 million) with a book value of $6 yields a 1.2 million profit.
Performance fee = 240 K.
Then exercise 300,000 warrants at $8 (2.4 million).

Net cash positive, even after setting aside the funds for the manager bonus.
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