Mark, you protest too much. The reason I believe they will call the warrants is that Mr. K is a first class businessman (I was led to believe he did some time on the Wall street and has a bunch of IOU there as well), and he will do what is right for the company. In his shoes I would call the warrants now because there is only downside risk in calling these later. Why only down side risk? Because Mr. K. has been around and knows that a long party as we have had for the last 9 years does not continue for another nine years, and if the opportunity exists to fill the coffers is here, now is the time to exploit it and not take the risk of a sudden bear market.
Furthermore, most of the people that have the warrants have no reason to hold them, since there is very little chance that from here they will go to premium over the stock.
You are so much in "love" with MVIS that you do not try to understand the dynamics of its price, the cash requirement for the next two three years and the absolute need (that Mr. K filled quite nicely so far) to get cash in the till that does not have unusual strings attached to it.
There is one scenario that would imply MVIS not wanting to convert the warrants, and that would be the availability of some $27 MM or so at a price that is much higher than $12 per share. Since I see no shelf registration of any secondary, I must conclude that a rational person like Mr. K. will do the rational thing, call all the warrants that have not converted on their own. To see how many warrants have already converted, call the transfer agent and ask for the current number of outstanding shares, compare it to the last number of outstanding shares and that will indicate to you how many warrants were already converted.
By the way, MVIS is not a "bad company" or a company with a floorless debentures, it is just ahead of its curve a little, considering that cash will be burned for some time and considering the risks associated with launching a completely new product, and thus there is a high probability that the trigger for a sizeable retrenchment will be the warrants conversion (and the completion of 20 days above $24, plus a grace?) and thus an increased supply of shares.
If you believe like one poster on the MVIS thread that this company will eventually have a capitalization of $10 Billions, by all means you should hold through all its gyrations. For the record, I do not know of any rational model that could value MVIS in the next 5 years at that $10 Billion capitalization.
Zeev |
