Longwei Petroleum (fka LPIH)

[Drexion2004]

I'm quite familiar with warrants, its unlikely that those would create 'overhang' (aside from a psychological one for regular investors) at $2.25.

Those warrants are the 'free upside bonus' given to the PIPE participants. With a long expiration, they are definitely not the kind of thing an investor would exercise right above the strike price. Waste of insanely good leverage if they do so for almost no profit. The higher above $2.25 we get, the more the 'warrant exercises' might pressure the stock...But it certainly wouldn't be significant in the $2.25-$2.5 range. I'd be very surprised if warrant-exercises played a strong role in PPS movements before the stock was above $3 personally.

All those 'estimates' that Crane made about the rate of preferred/warrant conversions are simply guesses IMO. I suggest we look at the true conversion numbers when next they report and see if its on track for his estimates.

-Fernando