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Microcap & Penny Stocks : Sanctuary Woods recent sale, should you own the stock?
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To: Kent Kuo who wrote (137)2/27/1997 9:12:00 PM
From: Jeff Korpela   of 341
 
A right is basically the same as a warrant. The main difference is that rights tend to expire much more quickly, within weeks usually, while warrants can last up to 5 years even. The release does not indicate when these SWD rights expire, but it would probably be within 6 weeks or so after they are issued. Rights can be sold on their own if a demand for them exists. They would have some value as long as the exercise price of the right is below the market price of the common shares. There are no commissions or brokerage fees charged when the rights are exercised. The reason for offering these rights is that the company needs money and has probably exhausted other methods of raising money, such as debt or a common share issue. Rights are normally offered at an exercise price well below the market price of the common in order to entice people to exercise them. Shareholders receive one right per common share owned in order to allow them to retain their percentage of ownership. To a certain extent a rights offering is shareholder friendly. The big question is can SWD stay in business? There might be a quick profit to be made on these rights if there is any kind of a demand for the stock in the 15 - 18 cent range. Hope this helps to clear things up. What happened to the share consolidation, does anyone know?
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