TPROW WARRANTS: Oct 23 & 24 Discussion
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From: Steve Woas Oct 23 1997 5:19PM Reply #4582
In the beginning of this month I did the math on the warrants (TPROW) and decided that since I thought the stock was going to go up, it made better sense math wise to control more shares with warrants. Here is the URL:
techstocks.com
From: lbs Oct 23 1997 5:39PM Reply #4584
At one point yesterday, the warrants were trading with no premium. The share price of TPRO was 3.5 higher than TPROW. Unfortunately for me, I only got 60% of the TPROW I intended to buy at 2 29/32- Then it took off. For many, the opportunity to control twice as many shares for the same price is worth paying a little in premiums. 90% of my position in Tava is in the form of warrants.
From: Skipard Oct 23 1997 11:02PM Reply #4600
I have a little experience in warrants, as excercising, converting, arbitraging is what I have done for over 20 years. I do this for companies, when they will work with me.
I would NOT buy TPROW warrants, because they will be called if stock trades over $6 3/8 for 20 days. Please understand that leverage works both ways.
Assume I buy 1000 TPRO for $ 6 3/8, (excluding commision, which is unrealistic) =$6,375. Stock goes to $7. I make $625 if I decide to sell.
Assume I take same dollars and buys warrants at $ 3.50=1821 wts.
Stock goes to $7.Warrants are worth $ 3.50. I broke even. Right now warrants are selling for premium, they shouldn't be. They should be offered at $ 2 7/8. When they are called they are going to a discount.
At $7 I still control my destiny, I can hold, when they call the warrants you are history. The MM's will screw you, TRUST ME. Now you are faced with selliong warrants at a disount, and replacing stock on offer side, the real world you pay commision, you get screwed.
I really do this for a living and have done millions of warrants, it ain't a good bet, and I do like to be bet, when the odds are good, these ain't. This is not my opinion, this is fact, according to Uncle Skippy.
From: Lawrence Hilzenrath Oct 23 1997 11:09PM Reply #4601
I agree. If you can buy the stock, buy the stock. Warrants are better for trading if you sell at a premium before they are called. Once they are called it gets very complicated because you now have to actually pay for more TPRO shares. There is always less to worry about by owning the shares. With a stock like this you will probably make money with either. JMO
From: John D. White Oct 23 1997 11:50PM Reply #4603
I suggest you all read Uncle Skippy's post real well. He is right.
It is nuts to buy callable warrants at that much of a premium.
From: count gold Oct 24 1997 2:00AM Reply #4606
SKIP....High 5 for that clear warning of the decided risk in warrants .... when you just look at leverage they look too good to pass up .... but in most cases they SHOULD be passed up. I have looked at the warrants of many stocks a few years ogo....and finally i jumped in on what looked like a sure thing ......and got burned by the MMs just as you described. Your advice is invaluable...not just with TPRO but for long-term investing purposes. With warrants you are betting against the house. The odds may look great on the board BUT after the game is over most players gonna be shakin' their heads n wonderin' ...... "how in the hell did that happen".
From: lbs Oct 24 1997 2:11AM Reply #4607
Hey uncle skippy, you sure are confident. Well, I am glad I get to hear the truth. God bless yah. Why don't you try to find a little humility. You are going to need it. No one likes a pompous rich person. Either way, I think we are going to be very happy about
owning the warrants or the stock. Did you ever think that not everyone can afford 5.0% of the float like a big shot like you can, and instead may want to hope that TPRO becomes marginable before the options are called so they can convert the warrants without having to put money down, or they wanted to keep other positions. If they spent
all the money on TPRO instead of TPROW they would have to sell some other stock for this current tax year.
From: Skipard Oct 24 1997 3:34AM Reply #4608
I certainly bow to your expertise in this matter. I thought perhaps people asking questions on the warrants should have a full understanding of the ramifications of owning the warrants, and the possibilities involved. I never knew you could excercise with out putting cash up.
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