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Technology Stocks : XYBR - Xybernaut -- Ignore unavailable to you. Want to Upgrade?

To: marianna who wrote (2157)	3/6/1999 6:56:00 PM
From: Dave Shoe	Respond to of 6847

On July 18, 1999 the warrants get called in (expire). You then have the right to give one warrant and $7.55 in cash to Xybernaut (within 30 days, I believe) and they give you one share of common stock (XYBR) in return. If the common closes above $7.55 on 7-18-99 this transaction is worthwhile. If the common is $7.55 or below at closing, the warrant is effectively worthless so you would ignore the call and lose your investment. To break even, the stock must obviously be $7.55 plus the price you originally paid for the warrants. When the warrants were issued three years ago, I believe they sold for $6.00 each. I believe the stock sold for about $15.00 back then. $7.55 is the "strike price". It was originally $9.00 but was adjusted due to a slight change in the number of shares outstanding (or something like this). I'm still learning about trading too, so my facts might not all be correct. Turning in the warrants will not dilute the stock, because the common shares are already in reserve. I think they might even strengthen the stock, because the company get's a $7.55/warrant cash infusion from the call. If the warrants are worthless, the reserved shares are nullified (I don't know the proper term). I think this reduces the number of shares outstanding. Shoe. ------------------------- Below is a portion of a description posted on another SI thread last year. It should help explain the common stock (but not the warrants). I found it helpful: ------------------------- Three common terms you will see on financial statements are: Shares authorized, shares issued and shares outstanding. Shares authorized- the number of shares a company is able to issue outlined in its bylaws. A vote usually needs to take place in order to increase this number. Companies rarely issue the number of shares they are authorized. Most authorize 100 million when they begin. The shares authorized does not increase automatically with a split. In other words if there is 100 million shares authorized and 50 million outstanding and a company does a 2 for 1 split there is still only 100 million authorized, but now there is 100 million issued and outstanding. One may think that the shares authorized doubles along with the outstanding, but that is untrue. A split is actually a dividend of shares. So say a company wants to do a 3-1 split and they have 50 million shares outstanding and 100 million authorized. The management cannot vote on a 3-1 split until they first have the shareholders vote to increase the number of shares authorized to 150 million. By looking at a company's shares authorized and shares outstanding you can figure out whether or not that company can do a split or not. So if there are rumors that a split may happen and some say 3-1 and 2-1 you can check the shares outstanding and shares authorized and see if a split is possible without a shareholder vote. Shares issued- the number of shares a company has issued out of what they are able to issue (shares authorized). This is essentially how many shares the company at one time sold to the public, management or insiders (more than 5% ownership in the company). Shares outstanding- the number of shares that are currently outstanding to shareholders (management, private, insiders or institutional investors). Most companies also require a vote to increase this number. For example a vote to offer a 1 share dividend for every 1 share of stock outstanding (aka 2 for 1 split) The reason the shares outstanding and shares issued sometimes differ is because a company can hold what is called treasury stock. Treasury stock is stock the company has previously issued and has been previously outstanding, but the company has since purchased back from the market and they hold for purposes of options and incentives for employees mainly. Float- the float is the number of outstanding shares not held by insiders or management. Essentially the number of shares freely tradable on a daily basis without filing a Form 144 to do so. Here is an example from MSFT's most recent balance sheet: 8 billion shares authorized, 2.408 billion shares issued, and 2.470 billion outstanding). They probably started with 100 million authorized and now it is 8 billion after all the splits.