Bernie, it's only been one day, and already a purchaser of the
stock is almost $875 ahead of the warrant holder.
The only reason why I've taken the time to update yesterdays
analysis is on the off-chance that a reader of this thread may
have actually been confused by your ranting and raving yesterday.
Clearly the correct choice is to finance the purchase by use of
margin, not warrants.
--Tony
Stock Warrant
======= ======
Holding 1,000 1,000
------- ------
Value at 2/6/98 (bid) $12,875 $6,750
Purchase price (see below) $ 5,625 $6,000
Less Margin Loan $ 5,625 n/a
Less Margin Interest 1 n/a
------- ------
Profit $ 1,624 $ 750
======= ======
----------------------------------------------------------------
Objective: Control 1,000 shs of Ligand
Stock Warrant
($11.25) ($6.00)
-------- ---------
Cash Paid (Stock pur on margin) 5,625.00 6,000.00
Margin Interest (use 8%) 1,150.00 n/a
Cash earned on excess funds(5%) 75.00 n/a
Exercise of warrant 7,125.00
Margin Loan 5,625.00 n/a
--------- ---------
Total cost 12,475.00 13,125.00
========= =========
Conclusion: Additional finace cost of warrant: $650.00
Smart Move: Buy LGND |
