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Alias Born 04/27/2009

Re: Drumstick post# 293

Friday, 04/30/2010 10:46:27 AM

Friday, April 30, 2010 10:46:27 AM

Post# of 328
believe me so do I, most people do.

Think of a warrant as a gift card that expires in five years.


1. you have $1000.00 dollars invested in the company and the company files bankruptcy.

2. The company issues a warrant(gift card) to you worth $10.00

3. You get 100 gift cards 100 x 10.00 = $1.000

5. You can use your gift cards to buy the stock at $10.00 a share anytime you want. But, the company may only be worth $5.00 a share when emerging from bankruptcy so you hold your warrants.

6. If the price per share of the stock never reaches $10.00 after bankruptcy during that five years your warrants expire and they are worthless.

.7 If the price per share reaches $20.00 you can use your warrants to buy the stock at $10.00 per share then sell your shares on the open market at $20.00 per share.

Now, you can hold these warrants hoping the company goes higher than that, which it may. It could reach say $60.00 which would obviously put more loot in your pocket.

Either way your warrant must be exercised within the five year expiration date or it expires.





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