> The condition you are setting, "...wants to control 1000 shares of
> Ligand," ensures that yours is the right answer.
That condition was always there, yet there was an overwhelming
number of posts that said that it was not the right answer.
Anyway, as I've also shown, even controling 2,000 shares by margining
the warrants still produced less gain (in one day)than buying 1,000
shares on margin.
> But, the one you pose is not the only relevant question, in my view.
> Another, question, equally valid, is whether or not LGNDW is
> appropriate for a long term Ligand bull with a given amount of money
> (on margin, or otherwise) to invest.
I don't understand this statment. That was what was being discussed
-- With $6,000 to invest for 28 months, should I buy LGND or LGNDW.
Granted, I did not show the cost of LGNDW on margin, so I've provided
it at the end of this post (clearly, "a long term Ligand bull with a
given amount of money (on margin, or otherwise) to invest" should buy
the stock.
> Nevertheless, I agree that the subject of your hypothetical, who
> wants to control 1000 shares of LGND -- no more and no less -- does
> best to simply buy common.
As I've shown, even when margining the warrants, its best to buy the
stock.
Cost of Investment:
Stock Warrant War/Mgn
($11.25) ($6.00) ($6.00)
-------- --------- --------
Cash Paid (Stock pur on margin) 5,625.00 6,000.00 3,000.00
Margin Interest (use 8%) 1,150.00 n/a 620.00
Cash earned on excess funds(5%) 75.00 n/a n/a
Exercise of warrant 7,125.00 7,125.00
Margin Loan 5,625.00 n/a 3,000.00
--------- --------- ---------
Total cost 12,475.00 13,125.00 13,745.00
========= ========= =========
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