In connection with the Merger, each outstanding warrant to purchase shares of FairPoint common stock converted into a warrant to acquire shares of the Company’s common stock, upon exercise, on the same terms and conditions that were applicable to such FairPoint warrant, except that the number of shares of the Company’s common stock for which each such warrant may be exercisable and the exercise price of each warrant was adjusted to reflect the exchange ratio. Accordingly, as of the effective time of the Merger, there are approximately 2,615,153 Company warrants outstanding, each eligible to purchase one share of Company common stock at an exercise price of $66.86 per share. The Company assumed these warrants pursuant to an Assumption Agreement, dated July 3, 2017, between the Company and Computershare Trust Company N.A. (as successor to The Bank of New York Mellon), as Warrant Agent, which is attached as Exhibit 4.1 to this Current Report on Form 8-K and incorporated into this Item 2.01 by reference.
So owning the warrants may have 3 possible outcomes.
1. The share price of CNSL goes above $66.86 before January 24 2018 in which case we could exercise the warrant through our broker to purchase CNSL stock at the lower price and make a paper profit on the difference.
2. The share price of CNSL looks like it will exceed the $66.86 mark and traders want to buy the warrants betting the price will go up and make the warrants more valuable as the timeline approaches.
3. We buy them and do nothing. The price of CNSL does not reach its mark. The warrants expire worthless on the 24th of January.
