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Strategies & Market Trends : Shorting stocks: High fliers

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To: Dante Sinferno who wrote (466)3/25/1998 12:57:00 AM
From: chester lee  Read Replies (1) of 709
 
Robert,

If you have the time, talk me through the mechanics of a warrant redemption, and associate the actions (and timings) with the expected stock behavior.

I once owned ALMI (alpha microsystems) that did a warrant redemption, and the stock was devastated, so I know there are detrimental effects to the stock price beyond the dilution factor. However, I'll admit I don't know what those factors are. I was always under the assumption that the cash intake from the warrant redemption would be positive for the company, and would offset SOME of the deleterious effects of the dilution. Talk to me Rob, as you are far more the expert than I on this subject.

Thanks,

Chester
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