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Strategies & Market Trends : 2003 Canadian Stock-Picking Challenge -- Ignore unavailable to you. Want to Upgrade?

To: RonS who wrote (394)2/25/2003 6:51:29 PM
From: geoffb_si  Read Replies (2) | Respond to of 790
 
Ron:

Not that Al needs defending, but I'll try:

In exchange for your 4640 BAY shares, you get 1784.54 PAA shares + 892.27 warrants.

Each warrant is exercisable into a PAA share after you pay the company $12 per warrant (within 5 years). Since the stock trades for $10.25/share, the warrants are out of the money.

Further, since you can't put any more money into the contest to exercise the warrants (EDIT: $10,707.24 to be exact) and get the PAA shares, and since you can't carry the cash + warrants in the contest, the value of those warrants at the time of the share exchange (today) is essentially zero.

Although the hope for BAY shareholders is that at some time in the future PAA shares sell for more than $12/share and those warrants are worth something, Al has no way to put a dollar value on those warrants at the present time.

Regards,
Geoff



To: RonS who wrote (394)2/25/2003 9:31:38 PM
From: Al Collard  Read Replies (1) | Respond to of 790
 
Hi Ron,

In an effort to keep the Challenge as simple as possible I am going to stick with selling your BAY-t at the start of today and treat the sale as a freebie, enabling you another pick in the month of Feb.

Your pick was BAY-t, it is no longer listed on the TSE so it is a deemed sale. If you would like to buy PAA with the proceeds of your BAY sale, you have a free trade to do so.

I hope this is an equitable solution to all in the Challenge.

Regards,
Al


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