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To: loantech who wrote (5274)	1/24/2006 5:51:28 PM
From: tyc:>	Respond to of 78419

I believe it is largely as Koan said. Three warrants give you the right to buy one share at $15 until Dec,5 2007... almost two years of life left. At today's closing ask, those three warrants would cost $2.16. I've never been able to understand how koan calculates leverage. What I ask is, "What would be the intrinsic value of the (three) warrants if the price of the stock were to double?". Today's stock price is $12.04, so double is $24.08. At that price, each three warrants would be worth $9.08 (24.08-15), which is 4.2x today's (3)warrant price. Therefore leverage is 4.2x. i.e. "If the stock doubles the warrant will go up four times". Not bad !