In spite of having traded warrants for many years, I have never exercised warrants up until now and thus would appreciate if someone could check my math / give me some input.
KRR.wt … I hold 50,000 wrts in one account at a book value of $6,100 ($0.122 / wrt).
4.5 wrts + $2.25 = 1 share.
50,000 wrts would result in 11,100 shares at a cost of approx. $31,100 (2.80/sh). Wrt book of $6,100 + (11,100 x $2.25) = $31,100
Assuming a share price of $4 this would translate into a paper profit of approx. $13,000
If I didn’t exercise and simply sold the 50,000 warrants at $0.40, I would have a real profit of $13,900.
Using the above numbers, if my math is correct, it doesn’t seem to make sense to exercise the warrants. True? False?
TIA for any input. |
