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Microcap & Penny Stocks : Microvision (MVIS) -- Ignore unavailable to you. Want to Upgrade?

To: Richard Tsang who wrote (2640)	5/22/1999 4:10:00 PM
From: Obewon	Read Replies (1) \| Respond to of 7721

While the stock remains above the $24 level, both the warrants and the stock SHOULD increase and decrease by the same amount in price (not necessarily the same on a percentage basis). The higher the stock price moves away above $24, the less likely it should be that the warrants ever trade less than (stock price - $12). If warrants traded LESS than (stock price - $12), there is an opportunity to make a riskless investment profit by buying the warrants, converting to stock and selling the stock. Buying the warrants would push up demand for them and thus increase their price until the opportunity is gone (this is called arbitrage). This same potential does not exist if warrants trade above (stock price - $12) since stock cannot be converted to warrants so there is the possibility that warrants can trade above (stock price - $12). However, the forced conversion feature after 20 days above $24 limit the time horizon and thus much of the potential upside that the warrants have over the stock. Due to various transaction costs involved, I would expect that as long as MVIS stays above $24, the warrants will trade at MVIS stock price - $12 +/- 1/4. Obewon