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.

Strategies & Market Trends : 50% Gains Investing -- Ignore unavailable to you. Want to Upgrade?

To: Elroy who wrote (117951)	2/18/2014 8:29:27 PM
From: Steve Felix	Read Replies (1) \| Respond to of 118717

Sorry, but it is a day (life?) of senior moments today. Wouldn't what you say be true if these were set up to trade as units - 1share/1warrant, which they were not. All I see them as is a possible gift to holders at the time. If they don't trade together why would shorts have to supply warrants? It isn't like they were attached to stock owned on a certain date. Essentially we got a dividend. A dividend with no current value. "We issued the warrants on October 15, 2013 as a dividend to holders of record of outstanding shares of our common stock as of a record date of September 16, 2013. Holders of shares of common stock on the record date were issued one warrant for every ten shares of common stock owned on the record date, with the actual number of warrants issued to each stockholder rounded to the nearest whole number and without the payment of cash in lieu of warrants to purchase fractional shares." I've received no reply from MHR yet, but did find what I had seen, but failed to find previously: "The warrants agreement currently provides that the warrants will generally be exercisable in whole or in part beginning on the later of (1) September 1, 2014 or (2) the date that a registration statement on Form S-3 has been filed with and declared effective by the SEC with respect to the issuance of the common stock underlying the warrants, and thereafter until April 15, 2016, which we refer to as the expiration date. The amended warrants agreement will provide that the warrants will become exercisable on the date of effectiveness of the registration statement of which this prospectus is a part and will remain exercisable until the expiration date or the earlier redemption of the warrants, subject to our right to suspend the exercisability of the warrants as provided below."

To: Elroy who wrote (117951)	2/18/2014 11:28:46 PM
From: Biomaven	Read Replies (1) \| Respond to of 118717

The person who is short the warrant (because they were short the Common when the warrant got issued) has to pony up shares if someone pays them $8.50. It's just like writing an uncovered call that is in the money and gets exercised. The short can either buy the shares on the open market or borrow them (increasing their short position). There's no way for them to cover their short warrant position until then because the warrants don't trade. So it just shows up in their account as a short position. If your (long) shares had been lent out, then the warrant position shown in your account is not one issued by the company; rather it is the one "borrowed" by the short. The same thing as with the exercise happens when a dividend-paying company declares a dividend. Anyone short the shares also owes the dividend (called a substitute payment). These warrants are weird creatures. If the company wanted to, and the stock was trading at under $8.50 in September, they could just make them go away by declaring the registration statement effective. If the stock stayed under $8.50 for the following 30 days they would essentially expire worthless. So it's hard to put a value on them - to some extent it's at the discretion of the company. (If I were asked to value them today for financial accounting purposes I'd be scratching my head how to do it.) Peter