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) |