Why the MIDLW warrants are undervalued right now... and why the "P" is even worse. The WARRANTS are the more timely play, IMO, right now.
Re-read the press release from the other day:
"The second matter is a reduction of the exercise price of the
Midland warrants (MIDLW) from $1.00 to $0.50. This brings the
exercise price of the warrants in line with the common. All other
conditions concerning the warrants will not be effected."
HERE IS THE KEY TO WHY THE WARRANTS ARE UNDERVALUED RIGHT NOW:
"As soon as the registration statement registering the common stock
underlying the warrants becomes effective, the warrants may be
exercised."
THE BIG QUESTION IS:
When will we EXACTLY be able to convert the warrants to common for 50 cents?
I have a call in to Daniel at Arcon. As soon as you can do this, the Warrants will automatically go up in value to 50 cents. The MM's are taking advantage right now, because they know it still technically costs us $1.00 to convert to 1 share of common....or perhaps there is not even any chance to convert right now at all, since we are in limbo with the warrants going down to 50 cents.
So.... the warrants are a steal right here if the common holds anywhere close to where it is right now.
REGARDING THE "P's":
They are undervalued as well...notice they are up even far less than the MIDLW's today. WHY?
They are suffering from a time lag. You do not have the ability to trade these guys as 35 shares of common until October 1, 1998. And the dividend on them does not become official until Oct. 1, 1999.
Because these are not liquid investments right now, they are suffering on price.
Now, as we get closer to Oct. 1, these will automatically go up in value, but many do not like to risk holding these for long, because they do not know where the common will be on October 1st.
If you are a believer in this company long term, the "P"'s are pretty hot value, but IMO, the warrants are absolutely the best way to go, since we are much closer to recognizing FULL VALUE.
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