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Kodibochu
Kurra Bewarse
Username: Kodibochu

Post Number: 4689
Registered: 04-2019

Rating: N/A
Votes: 0

Posted on Friday, January 22, 2021 - 10:02 am:   


Speaker:

choodaledu annaii..kshaminchudu..



Warrant: It gives the right to buy shares after the merge completes.
Example:" SV warrant gives you the right to buy one share for $11.50(strike price) after the merge completes. If the SV price reaches $20/- . Now, if you want to exercise your 'right to buy', here is the math for 1000 warrants-
Warrant cost($2*1000 warrants)= $2000
Your warrant value= $20-$11.5=$8.5
your profit=1,000*8.5=$8500
Your ROI= 325%($6500 profit on the initial investment of $2,000)

Risk: If the merge fails, you will lose the full money.

Here is the math if you buy 1000 shares assuming the market price is $20/--
Shares cost 1000*10.00=$10,000
The market value of the shares after merging=$20,000
your profit=100%

No risk here. If the merge fails, you will get your $10/- back to you. Of course, they may deduct some admin expenses9about 50 cents a share)

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