Replies to post #191218 on NorthWest Biotherapeutics Inc (NWBO)

[learningcurve2020]

Aka Dilution to common shareholders. Thank you, Ex.

[flipper44]

"Warrants NEVER have a positive value for the party that sold them. If they did, why not just pass out warrants for free? -- ex"

Not certain I agree with this in all cases, but I may be understanding something fundamental.

Let's say somebody like Neil Woodford has 50 million shares in a company, and he is getting close to controlling the company. This is just a hypothetical. All of a sudden he is stopped from investing more for a while. The company has knowledge, so they can't buy, but they and friendlies like Cognate can accumulate through debt financing. The cheaper the shares, and the more shares they obtain, the more they can regain control of the company and dilute NW. Thus, let's say a buyout occurs thereafter. At one time, NW would have owned let's say 1/4 of all securities and NWBO would have been in the same boat. After all the debt financing with cheap shares, oh and bonus options, etc, Neil is back down below 5% ownership whereas, let's say Cogante, Toucan, NWBO management, and a few other friends are combined well above 50%. So the party that "sells" the warrants, really helps themselves eventually?

[photonic5]

They are cashback to the buyer, not the seller. The warrants have to be executed at a cost to the holder. That money goes directly to the buyer. If a buyer offers $2 billion for a company with 900 million shares and there are an additional 100 million warrants executable at .50, the buyer gets 50 million back in the form of cash after putting up $2 billion. All shareholders subsequently receive $2.

It’s an indirect form of cost saving to the buyer.