George, I have a question that has perhaps been answered before, but it didn't seem relevant till now.
If Ancor stock reaches $74.50, Then when Sun buys $67 of switches and pays $7.50 for a share of stock(warrant), they get 1 share of stock worth $74.50 plus product worth $67 for a total price paid of $74.50. If the stock price rises above $74.50, it would even be profitable for Sun to buy switches, throw them away, and keep the stock.
Why would an investor buy stock for, say, $80, when the higher the stock price goes, the more it costs the investor(s) in equity when they sell switches to Sun?
If there are major revenues other than Sun, it might be considered just a cost of doing business, but there must be some mathematical equilibrium where the price becomes prohibitive for a person to buy stock.
What is your opinion on this ? wj |
