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Technology Stocks : IFLYW the IFLY-warrants, a REAL VALUE PLAY -- Ignore unavailable to you. Want to Upgrade?

To: blankmind who wrote (79)	4/23/1998 2:43:00 AM
From: Amit N. Sangani	Read Replies (1) \| Respond to of 171

Warrants will run at IFLY-6.25+premium. That means if IFLY becomes 10, warrant becomes atleast 3.75 (considering zero premium) which is more than double the current IFLYW price. Buy the warrants (IFLYW) for short term & IFLY for long term !!!

To: blankmind who wrote (79)	4/23/1998 3:11:00 AM
From: StaggerLee	Read Replies (2) \| Respond to of 171

>>why pay this premium? The premium is because the warrants give you two advantages over the stock: 1. Although you have all the up-side, if the stock drops, your loss is limited to 1 3/4. A holder of the stock can lose theoretically $6.75 based on today's price. You pay a premium for this "insurance." 2. Cost of capital - a holder of the stock has to tie up $6.75 in capital. At 5% for 3 years, this amounts to about $1. The warrant buyer has the same up-side potential as the stock buyer without incurring the cost of capital. The cost of capital is factored into the warrant's price.

To: blankmind who wrote (79)	4/23/1998 1:46:00 PM
From: LAWRENCE C.	Read Replies (1) \| Respond to of 171

1. The conversion price is 6.25. So premium at 6 3/4 is 1.75+6.25-6.75=1.25 premium 2. Why pay a premium? a. Someone will pay a time value premium if they expect the warrant to go up in value. The warrant is similar to an option that says I believe the common will go to $10 or above long enough for the warrant to be converted by someone to common and make a profit. b. When the common goes up the warrants tends to follow. Common Warrant $7.25 $7.25-6.25= $1.00 $8.25 $8.25-6.25= $2.00 $9.25 $9.25-6.25= $3.00 If you bought the warrant at $1.50 and it goes to $2.00 that is a 50% increase. A jump from $6.5 to $7.50 in the common is 1/6.5 or 15%. Lucky Lawrence