Sigma Labs Inc (SASI)

[Pisd]

I agree with your thesis, that I only pointed out exactly the intrinsic value. I tried to show there seems to be a point at which the warrants beat the stock, but then the "premium decay" as you say.

What would the premium be for the warrants after multiple gain?, I would think there would be no premium past a certain point, because if that were to happen times how ever many the stock price, then the warrants would mirror the stock. Or put it another way, once at parody, then you would just want to own the stock, of course.

Thanks for insightful points, and kind of validating my numbers/thinking in a general sense. Has come up many times, and thought to contribute. Plus I like train.

You're pricing it based on its intrinsic value.

Simply put, stock price - exercise price = intrinsic value...which can't be less than $0.00.

So where is this value coming from?
The time value of the warrant, which is to say the premium on the warrant for the length of the contract before it expires. The longer the time til expiration, the higher the premium because it's given more time to be in-the-money. As time goes on, this premium will decay (like you mentioned). Also, the higher the volatility, the higher the premium.

However, the further the warrant is out of the money, the lesser the premium...

The point is, these values aren't stagnant, they won't trade at their exact intrinsic value and should have some other value added.