manipulation or math?
posted on
Mar 11, 2008 03:21PM
OK... I was playing with a little math. Let's say that you purchased 1,000,000 shares in the offering and you received 1,000,000 warrants for 1/2 a share. So:
Your cost for the initial shares @ $2.10 = $2,100,000.00
You have 1,000,000 warrants = 500,000 shares (Cost $0.00 until you exercise)
You sell the original shares you purchased at an average of $1.95
The money you lent the company for the original shares minus the money you sold them for on the open market = $150,000.00
Your 1,000,000 warrants or options to own 500,000 shares cost you $150,000.00 or $0.30.
Now given you have the money, you believe or think you know this is going to go from (for example) $6.00 to $8.00, would you pay $0.30 to be able to buy 500,000 shares at $3.00 (plus the $0.30) or $3.30 total?
Oh... and guess what, you don't have to commit any more than your $150,000 until it's a done deal and you have a profit locked in.
Your downside $150,000.00. Your upside... $1,350,000 to $2,350,000. Like I said... manipulation or math? Or just plain old smart investing?
JMHO