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Politics : Ask Michael Burke

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To: yard_man who wrote (92257)	9/18/2001 6:32:14 PM
From: Tommaso	Read Replies (1) of 132070

It bounced back up some after I posted my message, but someone got some at $2.82. Doing the calculation for the warrant value: (based on the present moment) (9251-8695)*.00575=$3.197 (that .00575 is approximately $50/8695) As I explained in my PM, the 8695 stands for a euro value at issuance of $0.8695, and formula for the redemption of the warrant was the current price of the euor (28 Feb 2002) minus .8695, the difference divided by .8695, and that result multiplied by $50.00. The $3.10 closing price today was still a discount from the current value. The original warrant sold for well over $3.00, at a time when it had no intrinsic value. Of course, we are now only about five months from the settlement date. But for anyone who thinks the euro will increase in value against the dollar, it's a bargain--extremely leveraged speculation, of course. Merrill Lynch could buy back all the warrants at this price and pocket a 25% gain with no further hedging, and having had the use of the money for nearly a year.

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