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Gold/Mining/Energy : Arcon Energy (MIDL Presently) The Ultimate Sleeper -- Ignore unavailable to you. Want to Upgrade?

To: Thomas Barnes who wrote (1547)	5/29/1998 10:25:00 PM
From: Jay Lowe	Read Replies (1) \| Respond to of 4142

>> What would be the additional cash outlay The cash outlay to exercise ALL your warrants is simply .50 * (# of warrants). Your broker may or may not charge a commission. If you have 10000 warrants, you need to have $5000 bucks in your account to exercise them. If you don't have $5000 bucks, you can exercise 1000 of them for $500 bucks, sell the common for $2.50 = $2500 - the $500 = $2000 which you use to exercise more, etc, etc. Someone has posted a nice equation to calculate how many you have to exercise at a given price in order to exercise the rest. You can exercise them now, you can exercise them later ... in any case the exercise price (.50) is not related to the common price. The only connection is that you want to exercise them before the company has the option of redeeming them ... which itself is not a very likely action by the company and in any case can't be done without plenty of notice. There is no financial advantage to exercise the warrants now versus later ... except some people believe that the warrants sitting in your account may be used to illegally short the common. Well, not at any of the big brokerage houses. Once your warrants are in your account at the broker, the MM has no way to get at them. Besides, if warrants sitting in your account could be used for illegal shorts, the same risk applies to common ... so the argument is patently invalid. Just good folklore. I don't worry about it. If you want to hold, it doesn't matter when you exercise ... if you want to sell, you can sell the warrants OR you can exercise the warrant and sell the resulting common, either way, whichever is best for you. Now don't be shy about getting answers to your questions ... it's your money sitting there tied up in those equities, so you have a right to ask questions, eh? Just make an effort to do your own research ... you'll find the effort makes you a much stronger investor. Cheers ...