Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : QDEL - Quidel more quick diagnosis -- Ignore unavailable to you. Want to Upgrade?

To: steve dietrich who wrote (1655)	2/23/2000 1:23:00 PM
From: Bill Ounce	Read Replies (1) \| Respond to of 1693

re: warrants I'm not a great authority on warrants, so don't take this as "investment advise"... :-) Quidel recently registered the shares, so it looks like you can trade them in whenever you want to: quidel.com I don't remember the details on the warrant contract. I got them originally for purely speculative reasons a few years ago, and been rewarded for a patient long-term guess. Time to read up on the contract again or call Quidel investor relations for exact details. Some warrants are automatically called in by the company when the underlying stock rises to a defined level, while others exist much like a option until the expiration date. More complicated contracts could also define windows on when they can be exercised for stock. Do your own DD to verify that QDELW will not force you to redeem them early and you can exercise them whenever you want; one QDELW + $7.50 gets you one QDEL. To me, publicly traded warrants may be viewed as a multi-phase investment vehicle. It's like a long-term call option or LEAP. The early stage is very speculative, the end phase is arbitrage, and there could be several intermediate stages as well. Right now, we're in a "bonus" middle stage where the warrant is "in the money" stock is rapidly rising, with years left before expiration. For example, if QDEL hits $10 this week, the intrinsic value of QDELW is $2.50 plus more than 2 years of time value. The long term time-value on a rapidly rising stock is why QDELW sells for over $4 (and could sell for more). Compare this to options and LEAPS and you may conclude that this isn't all that expensive. There was a post on yahoo that gave the following formula to evaluate the warrants -vs- the underlying stock: X = 7.5/(1-(QDELW/QDEL)) messages.yahoo.com