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Has anyone else noticed that the FLCIW FLCI warrants are severly under valued? I copied the following from the quote.yahoo.com talk site on FLCI.
Since the FLCI Warrants (FLCIW) have a strike price of $5.5 and the stock is bid $6.5 they are called "in the Money". The ammount they are in the money is a real value and not a time premium. Since each warrant gives you the right to buy 1/2 of a share, each warrants has at least a $.5 value at todays market price ($6.5 bid). The rest of the valuation can be confusing, I don't even fully understand all of it but the basic principal is this. Given a certain call option (or warrant) out of the money (Strike price is higher than current price) the longer it has until expiration the more value it has, since
quite a bit can happen in time. You will see with calls that as the expiration comes closer yet the stock price stays the same, the value declines of the call. In the case of FLCI the warrants are in the money and they have 816 days till they expire. Plugging this information into option valuation formulas gives a value of $2.827144 per warrant. (Currently bid 1 7/16) Bloomberg currently gives wrong information about the FLCI warrant and has a strike of $8 something not $5.5. The strike bloomberg has is the old strike before it was changed.
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