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Microcap & Penny Stocks : Bid.com International (BIDS)
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To: The Osprey who wrote (7204)1/25/1999 8:25:00 AM
From: Mr. Forthright  Read Replies (1) of 37507
 
<< Strange thing about this is why would they exercise these if the stock is headed to the Nasdaq as all the talk seems to point to. Why not just play it short.Cover. Let it run and hope for the Nasdaq listing and then exercise the warrants after it hits the Nasdaq???? Just thinking and wondering what I would do.Possibly influenced by the "greed factor" LOL. >>

Well, here's how it works. An investor buys, let's say, 100,000 special warrants at $1.75. He pays the full $175,000 on the date on the issue (November). Once the prospectus which qualifies the special warrants is cleared the special warrants automatically get exercised and the investor receives 100,000 shares without having to make any further payment.

Sometimes investors will sell the shares prior to receiving them, hence locking-in a profit (or a loss). I guess those who have sold short (but a covered short) could always buy back and ride the stock, but it is unlikely.

Hope this helps.
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