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I wasn't sure so I googled it and found this:
What happens to warrants if the company is taken over or merges?
The warrant holders are usually treated well in a takeover situation. Some recent examples, Yamana Gold bought out Desert Sun on a stock for stock exchange and the old Desert Sun warrants are now traded as Yamana Gold warrants with the same expiration date. Another example was the buyout of Bolivar Gold was for cash and the warrants holders were treated well, even thought some of the warrants were still ‘out of the money’.
Recent history is teaching us that when a merger is announced and the company being acquired is consenting to the deal and the terms are a stock exchange as opposed to a cash buyout that investors should best sell their warrants at the prevailing market price. Our rationale is that if management has consented to the deal this will usually prevent any other suitors. Also, these deals take months to actually close and your investment dollars are basically dead money during this long process.
In a stock exchange arrangement, the warrants will continue on as warrants of the acquiring company with the same expiration date and with the exercise terms adjusted to reflect the terms of the stock exchange in the merger.
Commision costs thru scottrade were barely higher than buying the stock online, i was surprised as I expected a fee due to placing the order by phone. I don't remember the exact cost but I am certain it was under 10 dollars per order.
I would assume so, I can't say for certain as my experience with warrants is limited to what I have bought through Titan.
Yes that as true, there are other titan warrants that I did not even bother mentioning due to the fact that there seems to be no activity at all. The class B warrant has had an ask price of .50 for some time now making it very impractical to buy. I suspect that it won't be long at this rate before the same happens with the rest, but if you miss out keep in mind that likely a new class of warrants will be relesaed with the next public offering. The strike price will likely be some figure slightly above whatever the current pps is at the time.
You can exercise or sell them anytime before the expiration date.
I believe the launch in Europe is simply due to the fact that the process of getting approval there is a bit faster than FDA.
Regarding the warrants, if you want to look up the price, simply search TMD.WT.A for the Class A warrant with the 2.00 strike price that expires in June 2016, or TMD.WT.C for the 1.25 warrant that expires in 2018. Currently I believe the prices are .10 for the A and .21 for the C.
Purchasing them through Scottrade is simple, however you cannot do it online. You can however simply call them and purchase them quickly over the phone as you would any stock.
The price of the warrants has been gaining rapidly lately, even compared to the share price, but I did some math and they are still easily worth it if you believe in the company. Lets take your $1000 example.
If you purchase the stock, lets say at $1.00 a share to simplify things, you will have 1000 shares. Now lets be extremely conservative and you can see how well the warrants can treat you. If by June 2016 the share price is at just 5.00, which in my opinion is quite low, your 1000 shares will be worth $5000, if you sold them you would have a net profit of $4000a.
Now lets say you invested in the class A warrant at .10. Your $1000 investment would enable you to purchase 10000 of those at todays price. Under the same scenario, if by June 2016 the share price was just 5.00, your warrants would be worth $30000. (5.00 per share minus the 2.00 strike price. Your total profit would be $29000 when you subtract your $1000 investment.
Now if you want to plug in higher figures for the share price, the warrants value only increases exponentially from there. throw in a $20.00 pps figure and you are looking at $20000 worth of stock vs. $180000 worth of warrants.
The drawback: if the stock price by 2016 is just 2.00 or less then if you bought the warrants you are now out $1000 as they are now worthless. Where as if you had bought the stock it is still worth whatever the current share price is. For this reason I bought a little bit of the stock, a large number of class A warrants, and then a smaller amount of the class C that expire in 2018.
I sure will, I asked a few other questions along with it, I hope to hear from them soon.
I just emailed them asking about this, I didn't pick up on it before but glad to see that you all did.
pps at launch
what do you all think it will be? My guess, while being pretty conservative is 4-5
If you want to see the current prices, just search for tmd.wt.a and tmd.wt.c, there are two other warrants out there as well but they dont seem to get traded. Right now it looks like the class A are up to .10 per warrant and the class C are around .21
I am pretty new to Titan myself, I first got into them just a month ago, and became aware of the warrants whilst doing my dd. I was never aware they traded on the markets just like the stock until I read an article mentioning them. You can trade them exactly the same way you trade the stock, the warrants have a much lower volume however so keep that in mind. Also you may need to call your broker to place the trade.
yes it guarantees that price, even if the share price at the time is 20 dollars, you will be paying 1.25 or 2.00 depending on which warrant you have
Most of my stake in titan is in the form of warrants, they are much more illiquid than the common stock, but if you have done your dd and are confident in what this company can do in a 2 year time period, then the warrants may definately be for you. Basically they give you the right, but not obligation to purchase the stock at a set price at any time before their expiration date. I have Class A warrants which have a strike price of 2.00 and expire in june of 2016 I believe, and class C warrants which have a strike price of 1.25 and expire in 2018. The warrants were extremely cheap for awhile, they have rose quite a bit recently but still would be worth considering imo. I didn't have the funds available to buy 50k shares of stock at .50 like i wanted to, so accumulating warrants was what I went for. Beware that you do need to exercise or sell them before the expiration date or they expire worthless!
I was researching this a little more myself and I agree. If they can hold off until this phase of testing is finished then they will easily be able to do their financing without the pps taking a hit.
today was better than i expected, due to the holiday i expected another small drop. Perhaps this is the end of seeing sub 1 dollar pps?
btw i have traded recently in a company who had several months prior did a r/s and it wound up being a 3 bagger. they did the r/s to remain listed on nasdaq which gave them the time needed to turn things around
so if I own 1k shares of titan today and they do a r/s split but close 10 percent higher, how much money have I lost compared to if the r/s had never happened? What you are saying really isn't making sense to me...a 10 percent gain is the same if i have 1k shares at 1.00 each or 100 at 10.00 each. I'm newer to stock trading though so if i am missing something i would love to hear it. also how would it affect warrants? i have most of my cash tied up in those.
I mentioned this last night because I was looking over some old news articles and read this : http://www.titanmedicalinc.com/titan-medical-inc-retains-raymond-james-associates-inc-for-financial-advisory-services/ I figured they may have had something in the works that went beyond just issuing new shares.
whats the big deal if they do a r/s? when you see a company on the decline do it, its like putting lipstick on a pig lol but a r/s won't mean any loss in share value at all in this instance.
I am curious about what potential downside you see? Personally I am long on the stock, i have 2k shares and 40k class A and C warrants...probably not much compared to most on here but for me its a sizable investment.
about the future financing, I know they need another 35m but what would be the best way for titan to go about obtaining it...I am assuming it will be needed soon and that would be a pretty large amount of new shares issued..i was following soligenix (sngx) and they obtained financing in an interesting way, I'm not pushing their stock but it would be great if titan could work out a deal similar to what they have done recently.