InterDigital Inc (IDCC)

[jealmc79]

“I haven't found anything in the company's 10-Q's or 8-K's that clearly explains the language of the warrants and who will control the execution of those warrants (please provide a link if I'm missing something here). And despite your best efforts, Jealmc, that question remains unanswered.”

You’re right. There is a problem with the warrants if they are not exercised at the same time as the calls. You can go back to 2016 and see what happened then when the warrants were exercised up to 3 months after the calls expired worthless. Some of the warrants ended up being in the money. It cost IDCC about 24,000 shares. When this type of transaction ( hedged notes with warrants) is set up, the warrants have to have a later expiration date to get certain tax advantages. It also sets IDCC up for more dilution (or less profit gained from CallSpread) because they don’t have control of when they are exercised. I wasn’t able to find the expiration date of the warrants either. That’s why I’ve said things could get interesting around here.

My previous post just simplified what would happen if everything was exercised at $125. I am not predicting that everything will get exercised at the same price. All that being said though, the stock price would have to be at $327 when the warrants are exercised for the warrant holders to be owed 4 million shares. They would only be owed 885,460 shares with a $125 stock price.