You can read my posts on the lawsuit, I've probably posted 100 messages here today/tonight. It's not meaningless and should not be taken lightly. The risk is great and real, but my gut tells me that Intel will come out of it OK.
On the warrants, yes, they become INSTANTLY worthless at the close of business on Friday, March 13, 1998 [talk about an unlucky day; actually, the expiration date is later, but it fell on a weekend]. So by all means, get out before then, one way or the other.
As far as the split is concerned, you are covered. The number of warrants that you have will double, the exercise price will drop in half, it all works out. This was explicitly covered in the Intel press release announcing the split.
Between now and the expiration date, the warrants will essentially track the stock, always about $39 to $43 below the stock. There will be some fluctuation, but only within about that range, and only short term. Over the whole period, the warrant price relative to the stock will decline slightly, but it will be very slight, only perhaps $2 or $3 per share over the whole period. If you believe that Intel is going to do well, and you are right, this gain will totally swamp the $2 or $3 that you will lose over this ten month period. If you are wrong, of course, then holding Intel in any form is a mistake.
The real issue, especially with the lawsuits, is one of whether or not to hold Intel at all. If you answer this no, just sell the warrants and get out. If you answer it yes, then my inclination would be to sell them in October or January, when you feel that the time is right relative to the earnings announcements for 3rd and 4th quarter of 1997, which will come out in October and January, respectively. Usually, the stock peaks before the announcement, drops with the announcement and for a few days later, then rebounds, often above the pre-announcement price, perhaps two weeks after the announcement. But unexpected earnings can change this dramatically. And the lawsuits throw a whole new ingredient into the soup.
Best of luck [in the short term, we are all going to need it]. |
