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Non-Tech : PSCKF - Playstar Corporation
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To: heatseeker who wrote (226)5/6/1999 9:47:00 PM
From: stevie  Read Replies (1) of 330
 
As I understand it, warrants are rights to buy shares. When you do a placement you give warrants as an incentive. It means that the owner of the warrant can buy or excercise the warrant for the agreed price any time before the expiration date. Many of the warrants eg at .80 cents and above are "out of the money" and if they were expiring to-day they would expire unexcercised. Why would you want to buy shares if the price for the warrant is 80 cents but you can get those same share for 60 cents in the market?? To put those warrants into the "money" the price of the stock must be above the price of the warrant. Warrants also further dilute the shares because they are added to the amount issued. On a positive note, the money raised by warrants goes to the company.

Regards

Stevie
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