Steven, while your RDOC warrant scenario is certainly correct. . .the reasons I have not discussed them are first, because they seem overvalued already, thus not worth the added risk. You must hand over your warrant, which you paid $2.19 PLUS $5.74 to get 2 common RDOC! Thus, if you were to convert at the price right now, you would be paying $7.93 to get $6.25 worth of RDOC.
Second, the warrants were scarfed up in the pennies, so if/when the common does run the warrants will go up at a higher percentage rate, but then sell off FIRST. . . so you had better be VERY VERY quick on your exit strategy.
I almost NEVER make any money trading warrants. Why? Because I am a very slow daytrader. I don't have the fancy equipment necessary to beat the pros. . . so I don't try.
Now, it is good to hold some warrants on your long term holds. . . like LPTHA showed us. . . but without a guarantee of a price rise, the warrants of any stock are always going to be far riskier and more volatile than the commons.
So when you add the extra risk into the play. . .then offer to pay more than the commons are even worth, it hardly makes for a good play, in my opinion.
Sorry, Steven. . you know that I call them as I see them. . otherwise, I'd be of no use to anyone.
Rande Is |
