JohnCM Investment Corner

[JohnCM]

Thanks for sharing GE

Sure, I’m sure you know a warrant is an option to buy share within a certain time frame and at a certain price.
There can be many complexity’s in regards to how they were issued, recalls, extensions, well a whole host of others.
However, let’s just look at this stock’s warrants.

Below I pulled the warrant statements from the last 2 quarterlies.
As of December 31, 2020, the Company had 132,396,064 Subordinate Voting Shares issued, 149,000 Super Voting Shares which carry 1,000 votes per share and are convertible into 100 Subordinate Voting Shares per share, 4,000,000 Multiple Voting Shares which carry 10 votes per share and are convertible into 1 Subordinate Voting Share per share, 78,782,136 warrants outstanding (on an as-converted basis), 6,438,186 unvested restricted stock awards (included in the Subordinate Voting Shares outstanding), and 9,573,834 stock options outstanding.

As of May 31, 2021, the Company had 150,775,313 subordinate voting shares, 149,000 Super Voting Shares, 4,000,000 Multiple Voting Shares, 74,666,408 warrants (on an as-converted basis), 4,139,240 unvested restricted stock awards (included in the Subordinate Voting Shares outstanding), and 9,847,501 stock options outstanding.

So, from the last we have 74 million warrants outstanding, hence the derivative warrant liabilities, meaning they exist and have to be accounted for.

During the period from January 1, 2021 to May 31, 2021, the Company issued a total of 4,115,728 SVS and received $10.4 million in total proceeds as a result of all warrants exercised during this period.

They have already done 2 recalls on the previously issued warrants.

So, that gets us up to speed at least to the point of going forward.

74mil warrants on the books. The time frames and prices vary. They can extend and recall at any time.

First all warrants can expire and become worthless which would remove any liabilities they carry.

Second all warrants can reach the price point with in the time frames and covert. That would dilute the share total by 74 mil more shares and the company would take in {I’m going to use last closing price of 5.50] which means the company takes in 407 million dollars. Note the price they convert would be higher than the one listed.

Third and by far the most likely some expire and some convert, depending on issuance.

In all cases the company and the investors both win if the price goes up, neither win if it doesn’t, well, provided the company still needs money coming in that they don’t have to pay interest like there doing now.

And yes, I know this is a simple explanation of the warrant and this company, it can and is far more complex in regards to it’s usage but to type out all the ramifications would be a bit much for me. So, a little color will have to do.