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I was also confused as to how it could impact revenue, it's easier to understand if you think of the warrants as a form of rebate. The copy and paste below might explain it better (the last sentence is key)
The grantor usually recognizes warrants as of a measurement date. The measurement date is the earlier of:
1)The date when the grantee’s performance is complete; or
2)The date when the grantee’s commitment to complete is probable, given the presence of large disincentives related to nonperformance. Note that forfeiture of the warrant instrument is not considered a sufficient disincentive to trigger this clause.
If the grantor issues a fully vested, nonforfeitable warrant that can be exercised early if a performance target is reached, the grantor measures the fair value of the instrument at the date of grant. If early exercise is granted, measure and record the incremental change in fair value as of the date of revision to the terms of the instrument. Also, recognize the cost of the transaction in the same period as if the company had paid cash, instead of using the equity instrument as payment.
A final note for you (hope you are also reading this uksausage) there is a major clue held in warrants that have been issued. I don't give advice make predictions etc. (I'm not smart enough to) GLTY!
I figured out how they calculated the 10Q amounts for "Provisions for Common Stock Warrants". It represents Amazons initial 5,819M @ 1.1893 plus the first of four 7,274M @1.1893 plus Walmarts initial 5,819M @2.1231. There is a bit of a discrepancy (~$1.8M) but that is explained by looking at the 9 months ending Sep 30 amount vs the 3 months ending amount. I hope everyone is not reading this and saying "well DUH" ie. already knew that.... lol
That does pretty much sum it up however; Amazon & Walmart warrant deals are pretty much identical (in Qty, time, etc.) but with one exception. Amazons first and second tranche(s) .. ~35MM wrrnts/shrs .. has conv price $1.1893. Walmarts conv price is $2.1231 .. I'm perplexed as to who, if either, got the better deal.
It's also confusing as to calculating the discount amount. Using Amazon as example .. for $50M in business, Plug provides 7,264,565 of warrnts w/conv price of $1.1893. Should Amazon conv those warrants Plug would receive $8.6M. Or is that amount considered prepaid ? IDK Lots for me to learn here for certain tho .. lol
Thanks uksausage, I didnt even need to go back and re-look the 10Q as I distinctly remember (with help of your mentioning) seeing that and wondering "WTF?" .. lol .. That was (is) a big chunk of change. I now plan to investigate that further as well. I will reply again to you if I find anything noteworthy. Thanks again, that is an intriguing issue for sure.
Thanks Max, "To many guesses" for certain .. lol... Another one HB did (very similar) on same day is CYCC https://www.sec.gov/Archives/edgar/data/1130166/000139382518000023/CYCC-13G.htm
Max, couple quick comments/questions followed by my thoughts/guesses.
1) In an earlier post you said friend thought warrants purchased/held by HB likely priced ~$1.70. Wouldn't this require a new warrant series (ie. "E") be registered? I see no existing warrants with that conv price. Perhaps I'm confusing with convertible notes/PS?
2) The 13G schedule was filed pursuant to rule 13d-1(b). I thought perhaps following that lead might provide insight on this transaction. Only info gained was it it seems filing is required w/in 10 days of trans.
https://www.sec.gov/rules/extra/amnd13dg.htm
I also took a look at Tech Opportunities LLC - its a private Co. so only thing I found of any related interest was they are decent sized S/H of PLUG Power after having converted warrants to the tune of ~$15MM
My initial thought was this seemed like more of a disclosure filing and that HB made purchases in the previous offering. I'm still somewhat of that opinion but I defer to your expertise.
Thanks!!!
uksausage, could you elaborate on how "warrant accountability" impacted Q3 numbers? I fail to see how warrants could have an effect on earnings. Diluted earnings perhaps (if PPS > warrant conv price) Input would be greatly appreciated Thx
yeah but then my gains from PPS increase are eaten up by gas prices DANG!! ... lol
6:45pm
Drop?? Is up 16% during RH's and another 2% AH's (5:44 pm / 16K in total Vol thus far in AH's)
The SEC filing was alerted
alerts didnt start showing up till about 7:45pm.
Director Akkaraju Srinivas Insider purchase 976,467 shrs https://www.sec.gov/Archives/edgar/data/1253170/000120919117064066/xslF345X03/doc4.xml
Thanks Max, Last 10Q FCEL had ~10M wrrnts @1.28 and 12M @1.60 still unconvrtd and 61M OS (as of Sep), The 14A filing indicated 69M OS as of Oct 31, I assume from that ~8M wrnts conv during Sep-Oct (adds $10M to FCEL's coffer). So leaves 2M at 1.28 and 12M at 1.60 remaining. If they also conv it would add ~$23M to FCEL's coffer.
Would pps have to be over 1.84 to entice series C PS to conv?? If they did does that add cash to FCEL's coffer (ie.18M shares at 1.84), or does it free up cash? or would it just act as an exchange for debt?
An odd line of questions I know and I apologize for that. I'm trying to get an idea of what FCEL's cash situation would/should be. If I'm headed down the wrong path just let me know. Thanks very much.
Sounds sorta like the functional equivalent of a Letter of Intent, would that be a fair analogy? Now how to uncover financing & cost info hmmm...
Dang Tardis24, almost need an extended magazine to hold that many bullets!!!....LOL....GLTY!
That was reported as of 9/30/2017 why are you making such a big stink about it now? http://www.nasdaq.com/symbol/rad/institutional-holdings/activity?page=4
LOL...You plenty clazy ResearchDD....Article Dated Nov 16, 2017 - Canyon Capital Advisors Increased Position in RAD by 315% https://www.gurufocus.com/news/596857/canyon-capital-advisors-llc-buys-ocean-rig-udw-inc-the-kroger-co-eqt-corp-sells-reynolds-american-inc-mckesson-corp-cardinal-health-inc/affid/431300
LOL- I saw your post right after submitting mine, great minds think alike I guess...lol.
I also caught that increase in OS (seemed kinda odd they could state what the Oct 31 OS number on what was it Oct 27th) oh well. Those 1.28 warrants are only good through May 3 2018 so I figured they would convert sooner rather than later. I sold 2/3rds of my holdings at 2.04....bought back 1/3rd at 1.62 yest.
I hear ya too when it comes to "our friend" no biggie to me. Only been trading for a year, even with my limited experience I can separate the wheat from the chaff.
Really appreciate the help GLTY!!!
Thanks Max! I have a theory on the reason behind the recent PPS pounding I want to run by you. Could it be that warrants are being converted which in turn is flooding the mkt w/shrs = pps decline? If I recall there were ~10M @1.28 and 12M @1.60 as of last 10Q. L2 pricing today seemed to show support at 1.60 which is kinda what lead me to this belief.
Jack B. (if ur reading this) & if it's not to much to ask can you please ignore this or if thats not possible then moderate your negativity a bit? tyvm
Thanks for your assistance MAX I appreciate it
It's unreal how many "traders" can misinterpret a vote for an increase in authorized shares as dilution. I consider myself a novice trader at best and even I understand the difference. I can understand the misinterpretation but to go off slinging inaccurate dribble as opposed to putting forth the effort to understand it is just ??????? Appreciate the info and updates Max ty
What I found odd about the SEC filing was how they knew on Oct 27 (Sched 14A filing Date) what the OS would be on Oct 31. I dunno just struck me as being odd. Thanks again for the help/info.
Max, Thanks for the info, the only (minor) discrepancy I find is that in Prop 1 the shortfall re:the 19.9%, relates to...Should the holders of all PS decide to convert that would require 18M CS to cover. The 19.9% limitation would only allow company to release 19.9% of the OS which in this case is 69M (as of Oct 31) = 13.7M Thus a shortfall of 4.3M shares which the Co. would have to come up with the cash to cover. I know this is written in confusing fashion, hope I'm making sense, in a hurry is all. Thanks !!
Do you think there has been some additional Series C & or D warrants converted during the last 5 weeks or so (since last 10Q)? Last 10Q indicated 1.3M shrs issued due to warrant conversion. The remaining 10.6M (@1.28) have a May 3, 2018 expiration + 12M (@1.60) which have 4+ years left. It wouldnt be a bad thing if they have it would help explain drop in pps experienced in last week or so.
Thanks (For all the helpful info)
Yep I sure did catch that and can hear it in my head plain as day!!! I'm liking the whole H2/FC sector, in on PLUG n FCEL, more LT on FCEL tho, IC PLUG paying out prior to next ER (3-4wks) GLTY & Thx
gotta love the Yul Brynner !!!
are you guessing about warrants being converted (which is by all accounts likely to be a very good guess) or do you have actual real time visibility of this occurring ? thx
true that hostastock, if there was a lot of short covering on Fri (what with the big volume) will the increased supply of short stk = decrease in their cost which is when that shorting crew pounces.
lol....definitely have to to give you a capital E for effort uksausage. I guess the only explanation for the misunderstanding of the filings is "perception is reality"
cannot access the link, could you provide the gist of the article? Thanks EE
Thanks Maximilliano, I suspected something wasn't right there..lol. All I knew for sure was that it was a portion of the 1.28 warrants that were converted.
Question about outstanding warrants. May 3, 2017 Series C & D warrants issued for 12MM CS shares (each) w/conv price(s) of $1.28 & 1 year expire / $1.60 & 5 year expire respectively. The latest 10Q (9-8-2017) say a total of 1,377,540 shares issued as a result of Series D warrant conversion for which the Co received total proceeds of $1.8MM Doing the math this equates to ~$1.28/sh. Which to me says the warrants that were (have been) converted were Series C not the Series D. Think about it, why would anyone have converted warrants in the third qtr at a conversion price of $1.60/sh? I am basing my question regarding accuracy on FCEL's 10Q Pg 15 under Public Offering and Outstanding Warrants section. It's not that big of a deal it just seems inaccurate to me. https://www.sec.gov/Archives/edgar/data/886128/000156459017018506/fcel-10q_20170731.htm
What is your take on the implications of this with regards to GSAT?
2.1 million in total short sales volume over last 2 days. Any ideas as to why?
One other thing worth mentioning is that settlement date(s) just went from T+3 to T+2 effective 9/5/2017
Yes short sales volume has been huge for the past couple of days but I dont understand why that would be "exciting". Is that in a bullish or bearish sense? Thanks in advance for explaining.
Is short sale covering volume counted as part of Daily Short Sale Volume by sites such shortvolume.com ? Thanks