RB, Re: How many simple reasons are there that LGNDW makes a superior investment choice than LGND. RB, you listed two simple reasons for preferring the warrants. The third reason is the important one that provides the riskless leverage, namely, that the warrant purchaser's outlay, to get the benefits of the stock & minimize the risk of it, is only 60% of what the purchaser of common would be obligated to pay. Get more, pay less. What could be better?
Your conclusion to put a similar dollar amount into the warrants instead of the stock is riskier if the stock does not perform as we would hope. Because I believe the stock will eventually reward patient holders handsomely, my own personal position in the stock is principally via the warrants. I took the position I did, in the discussion on preferability, to demonstrate that the warrants were not riskier than the stock, under the conditions that applied at the time I posted, despite protestations, seeminly based on misunderstanding or distortion of academic theory by other posters on the topic, that they were. I didn't want the observers of the discussion to think that while the warrants were the preferred choice , they were actually riskier than the stock, when compared on a share for share basis, under the conditions that obtained at that time.
It appears we have similar expectations and are attempting to capitalize on them similarly. Good luck to all of us including the lurkers & peepers. |
