The warrants (symbol TXB/WS) still seem to be way undervalued. The particulars of the warrants are this:
Warrants Outstanding: 4,082,500
Expiration: December 15, 1998
The Company will issue one share of Common Stock in exchange for $8.44 and one Warrant. The Warrants will be redeemable for $.05 per Warrant, at the option of the Company, upon 30 days' prior written notice at any time after the last sale price of the Common Stock has been at least $11.82 per share for 30 consecutive business days ending within 15 days of the date of the notice of redemption. All of the Warrants must be redeemed if any are redeemed.
The warrants, therefore, predict a stock price of only $9.30 or so, given that they last traded at 7/8, by their date of expiration. This seems very low given that I would expect the stock price to be in the low to mid teens by the time December rolls around (or sooner) with the different events that are expected by that time (first approval, etc.).
IMHO, these warrants are probably a better buy than the stock itself. I noted a similar situation over a year ago, where Medarex warrants (used to be MEDXW) were similarly undervalued, then tripled in price within a 5 day period. These warrants (TXB/WS) are also attractive in that they are publicly traded and seem to be very liquid. The symbol may be a bit different depending on which quote system you look at (for example, yahoo is txb_t). But they are easily bought and sold just like a stock using the proper symbol.
Here are what the warrants should be worth at a given stock price:
Stock PriceÿÿÿÿWarrant Value
ÿÿÿÿ$8.44ÿÿÿÿÿÿÿÿ   $0
ÿÿÿÿ$10.44ÿÿÿÿÿÿÿÿ  $2
ÿÿÿÿ$12.44ÿÿÿÿÿÿÿÿ  $4
ÿÿÿÿ$14.44ÿÿÿÿÿÿÿÿ  $6
ÿÿÿÿ$16.44ÿÿÿÿÿÿÿÿ  $8
So, let's say that the price goes to $15 after approval. These warrants should be worth about $7.50 at that price, or would give a total return of about 700% at current prices. That would be pretty good, no?
Please do your own due diligence, but I can't help but point out the above! |
