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Gold/Mining/Energy : Arcon Energy (MIDL Presently) The Ultimate Sleeper
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To: Netnut7 who wrote (2583)6/5/1998 12:41:00 PM
From: Ga Bard  Read Replies (1) of 4142
 
1. warrent is like an option: right to buy 100 shares with a strike price and a long term expiration date

The warrant allows you buy presently 1 share of common for $0.50 but you have to add in your purchase price of the warrant. Ex if you bought a warrant for .30 + .50 to exercise you have .80 investment in 1 share of common.

2. If price goes above strike price ex. strike of $1 and price is $1.25 the warrent would be worth .25 (25 cents over the dollar) plus any premium, plus time value. Not sure how premium and time value are calculated.

Depending on where you bought in you add .50 to the purchase price and suntract that from the common bid price for your gain. Ex. using the previous calculation if the common price goes to $1.25 and you exercie you have a .45 gain.

3. If price goes above $2.5 on these warrents the company calls warrents in and limits your upside.

They can yes ... $2.50 for 10 consecutive days they can recall the warrants.

Question: IS IT MORE ADVANTAGEOUS THEN TO BUY THE COMMON STOCK SO AS NOT TO LIMIT UPSIDE?

Well if you execrise and the stock is at $2.50 the warrants should be aroung $2.00 . you would make $1.20 gain or 6 times investment on the warrant.

Hope I explained that right

GB
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