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Technology Stocks : IFLY - travel sales on the web pure play
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To: Ron Kline who wrote (2664)11/30/1998 10:01:00 PM
From: SkyDart  Read Replies (2) of 4761
 
IFLY warrants are exercisable after Jan 1999 without written permission and are exercisable immediately [allowing one to use one warrant and purchase on share of IFLY stock at 6 1/4 per share regardless of the prevailing market price] with written permission from the holding company.

Warrants are like ultra-long term call options or LEAPS in many respects, although these particular warrants sell for an unusually low premium with a high intrinsic value.

At close with IFLY stock at 8 5/8, the warrant is selling at 2 1/2. The intrinsic value is 2 3/8 [market price less strike price; 8 5/8 - 6 1/4 = 2 1/2]. The premium is 1/8, the remainder. In essence you are only paying 1/8 point for the time value remaining which is 5 years.

A call option with even 2 years remaining such as a LEAP would command a premium in this case of at least 2 full points; Therefore the warrants at these prices are a steal.

The company has a right to accelerate the expiration date should the IFLY stock trade above 10 for 7 out of 10 consecutive days. They must give 30 days notice if I recall correctly.

All this means is that you would have 30 days to sell at the open warrant market or to buy the stock at 6 1/4. Both situations would be highly favorable for the warrant holder.

As an example, AMEN warrants closed at 2 1/2 on 11/25. They closed at 13+ on 11/27. They traded up to a high of 26 today. A ten bagger in 2 trading days.

I believe IFLY warrants are capable of the same performance as the stock skyrockets.

Good Luck,

Jeff
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