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(Conversion price) 4.00 + 0.355 (warrant price) = 4.355 > 3.25 (mother price) which not worth converting, if want to own mother shares, just sell your warrants and straight away buy mother share.
Ah Choon Wong
Is the warrant we get free? I refer to the initial RM0.305. Or is it reflected in the share price which was adjusted accordingly? Because i only saw the price halved after BI.
If the warrant is free, shouldnt the formula be (Conversion price) 4.00 - 0.355 (warrant price) = 3.645? Since the free warrant will offset RM4.
let's first not care about how you got this warrant. if you now have the warrants, you need to top up 4.00 per warrant to get the share. exercise price=amount you need to TopUp. the warrant price is the price you paid to get this warrant, like you are buying a pass to topup a fixed amount. now price is 0.365. 0.365+4 is your cost. your cost minus the share price is the premium. if you think the share will eventually be higher prior to maturity if you buy the warrant now, you would think the ...
... premium would worth it. just like you pay the premium for your insurance policy cuz you think it is worth it. just like the share price trend, instead of looking at the premium or the warrant price at a given point in time, look at the trend. if the price trend is up, probably ppl think the warrant and the (increasing) premium still worth it.
Jason Lee
Thanks for your explanation, yes I do understand all these theories about warrant, premium, strike price, ratio, etc.
But I just want to know the bonus issue of warrant, is it really given free?? haha. Bonus share isnt free as it is adjusted in share price. Just wonder and want to confirm.
If it is indeed free, the above formula would be slightly different already.
@yz yes it was given fuhreeee. in the last bonus issue, they gave bonus warrant and bonus share. with the bonus warr they wanna encourage people to convert later (provided price is good) to own the shares. btw what do you mean bonus issue wasn't free because it is adjusted in share price? it is free even tho price is adjusted, versus stock split. the free bonus issue has positive impact on the dividend payout (you get more dividend in the future) as opposed to stock split
It's not free warrant given out literally, the price of mother is adjusted to distribute the so called free warrant. If you have faith in frontken then just hold on to it, if no faith just throw the warrant and buy back additional mother
