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Re: Drexion2004 post# 64

Saturday, 11/28/2009 1:09:06 PM

Saturday, November 28, 2009 1:09:06 PM

Post# of 34471
Drexion2004--

Just a quick question. (trying to understand the risk-reward ratio for warrants).

If there is a market sell-off and if it takes TMI stock to $9, common will loose by 30%, but warrant holders will loose by ~50% (9-6=3), right?

I am assuming strike price at 6.

Now in that scenario if the company decides to call (via forced registration or whatever) it forces one to buy common at 9 or loose all.

Is that a possible scenario? Pardon me for my ignorance, I am just trying to weigh-in pros and cons of warrants versus commons.

TIA for your time.

ps: I am bullish on TMI as a company long term.


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