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Thursday, December 03, 2009

Company Warrants Expiring in 2009 - Actions Needed

I need to remind myself all the outstanding company warrants that are expiring in 2009 in my portfolio which I will need to take action. I will update this list accordingly as I go along so that I won't forget about them.

ELITE KSBW090109, Expiry Date: 9 Jan 2009, Exercise price = $0.05, Conversion ratio 1:1 - Warrants exercised and converted to shares.
S'PURA F W090301, Expiry Date: 1 Mar 2009, Exercise price = $1, Conversion ratio 1:1 - Warrants exercised and converted to shares.
FRTLINKS W090303, Expiry Date: 3 Mar 2009, Exercise price = $0.05, Conversion ratio 1:1 - Warrants expired worthless.
TEE W090409, Expiry Date: 11 Apr 2009, Exercise price = $0.13, Conversion ratio 1:1 - Warrants exercised and converted to shares.
LEEDEN W090417, Expiry Date: 17 Apr 2009, Exercise price = $0.25, Conversion ratio 1:1 - Warrants exercised and converted to shares.
HOE LEONGW090530, Expiry Date: 30 May 2009,Exercise price = $0.16, Conversion ratio 1:1 - Warrants expired worthless.
DAYEN W090703, Expiry Date: 3 July 2009,Exercise price = $0.18, Conversion ratio 1:1 - Warrants expired worthless.
GOODPACK W090716, Expiry Date: 16 July 2009, Exercise price = $1.38, Conversion ratio 1:1 - Warrants expired worthless.
ENGKONG W091113, Expiry Date: 13 Nov 2009, Exercise price = $0.05, Conversion ratio 1:1 - Warrants exercised and converted to shares.
SHANGTUR W091120, Expiry Date: 20 Nov 2009, Exercise price = $0.32, Conversion ratio 1:1 - Warrants expired worthless.
ST JAMES W091224, Expiry Date: 24 Dec 2009, Exercise price = $0.075, Conversion ratio 1:1 - Warrants exercised and converted to shares.

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20 Comments:

Blogger bk said...

Hi,

You really have lots of stocks in your investment portfolio.

Want to swap links?
http://sgstockscreener.blogspot.com/

6:47 AM  
Blogger ghchua said...

Hi bk,

Your blog looks great! Yeap, already link your blog.

9:39 PM  
Blogger Kay said...

Hi ghchua,

I'm Kay from moneytalk.sg
Interested in exchanging links ? :)

Kay

7:42 AM  
Blogger ghchua said...

Hi Kay,

Sure. :)

8:10 PM  
Blogger Jess said...

ghchua,

Are you still buying into counters... Never really hear your new investment...

Hope you are still staying vested, yeah...

12:05 AM  
Blogger ghchua said...

Hi Jess,

There is not much new investments from the markets lately because I have been subscribing to some rights issues. I am also saving some cash for CapitaLand, CapitaMall Trust and Bukit Sembawang rights issues coming soon.

8:44 PM  
Blogger jeflin said...

Hi ghchua,

Been reading some of your blog posts. Good information.

I have been staying out of the market for a while now. Are you still bargain hunting?

By the way, will you like to exchange links?
http://jeflin.net

8:44 PM  
Blogger ghchua said...

Hi jeflin,

Thanks for dropping by at my blog! Hope you enjoyed your time here.

Definitely buying at current levels. But with companies announcing rights issues, I will be conserving some cash to subscribe for these rights issues.

Sure. Let's exchange links. :)

10:13 PM  
Blogger Jim Tan said...

Wow! A lot of paper money on your hand! Rich man!

8:10 PM  
Blogger Everlearning said...

Hi ghchua,
I noticed that you forgone some warrants but took up some. Would you share why because I am given warrants if I keep this share in my portfolio?

Another question is why does company issue rights and at the same time grant warrants? What rationale is behind all this?

I would greatly appreciate your enlightenment on this matter.

10:17 PM  
Blogger ghchua said...

Hi Everlearning,

There is no reason to exercise a warrant and convert them to share if the company warrant strike price is higher than the current market price of the stock. Let's say you are given a company warrant with a strike price of 5cts and the stock is currently trading at 3cts, there is no reason to pay 5cts to convert when you can buy the same stock at 3cts right?

Which is why I let some of my company warrants lapse on expiry. If you are holding some company warrants currently in your portfolio, you should take note of their strike price and expiry date. Also, try not to convert early since you can actually put your funds into better use as you have the right to convert anyway before expiry if you hold the warrant.

Of course, you should also access the company's fundamentals and see whether it is worthwhile converting those warrants.

Companies issue rights because they need money now. Companies grant warrants simply because they can get additional funds if you convert those warrants into shares. They may not need these additional funds for now, which is why they issue warrants so that they can get these funds at a later date. It is part of their capital management exercise. However, do take note that company warrants are dilutive, which means there will be more shares outstanding out there if they are converted to shares, thereby reducing the company's EPS.

Hope that the above answers your queries.

7:45 PM  
Blogger Everlearning said...

Hi ghchua,
Thanks for you advice regarding to responding warrants' issue.

It doesn't make sense at all to take up the warrant if the price is higher than buying from the stock market. What if the share dips below the price of the rights issued by the company, would it be better to buy from the stock market than to take up the rights?

11:03 PM  
Blogger ghchua said...

Hi Everlearning,

Rights issue can come in a form of shares, warrants, convertible bonds etc or a combination of these. So, I don't quite get you actually when you use rights and warrants together in your last post.

You mean rights that allows you to subscribe to warrants?

Company warrants have value even if their strike price is higher than the current market price. This is because besides intrinsic value, warrants also have time value. Which means, it might make sense to take up warrants with higher strike price than the market price if the expiry date of the warrant is still far away from the time when the warrant is being offered to you.

Also, one can "lock in" the time value of a company warrant early in the game by selling the warrant and buying the underlying shares at the same time. This is one of the strategy which I have explored on a few company warrants that I have in my holdings.

1:23 AM  
Blogger Everlearning said...

Hi ghchua,
This company I am vested in is Yellow Pages. Currently, it issues rights and warrants to the shareholders (2 for 5 rights and 2 warrants).

Precisely, I am unsure what action to take and knowing that you are experienced in stock investments, I seek your advice.

5:14 PM  
Blogger ghchua said...

Hi Everlearning,

For Yellow Pages, you have not much choice but to subscribe for the rights issue. Because it is a massive dilution on the part of the company to do this rights issue.

It is a 5 rights shares (with 2 free warrants, exercise price 17.5cts) for every 2 shares that you currently own. Assuming all rights shares had been subscribed and all warrants had been converted to shares, we are actually looking at a 4.5 times increase in share capital!

I guess you have no other choice but to subscribe for the rights issue.

8:20 PM  
Blogger Everlearning said...

Hi ghchua,
Thanks! You have been a great help!

5:05 PM  
Blogger Everlearning said...

Hi ghchua,
Again I encountered this problem. This has been my fifth time buying a stock way below my bid.

Isn't it ridiculous for the broverage firm to make me buy 8 lots out of 20 lots I bid? And then, I have to bid another time to make up to the number of lots I wanted to buy another day. So, instead of paying one fee I am made to pay two fees.

Is there a way I could avoid such a purchase?

2:52 AM  
Blogger ghchua said...

Hi Everlearning,

If you had known that only 8 out of your 20 lots had been filled during the same trading day, you can actually try to buy another 12 lots during the day so that they all incur only one brokerage charge.

I guess there is not much choice for you if you have discovered it at the end of the day when the market closes. If you really don't want it to happen next time, just take whatever you want from the seller at market price rather than trying to queue everytime.

6:10 PM  
Blogger Everlearning said...

Hi ghchua,
Thanks for your prompt reply.

It was always at the closing time that I found out myself to be the buyer of that particular stock and I could not cancel the bid on time.

I feel that the brokerage firms are ultimately the ones who gained from such transactions by giving a few lots to the bidders.

In order to safeguard myself from such frustration, I would cancel all orders by three o'clock.

Alternatively as you suggested, buy at the seller's bid.

6:34 PM  
Blogger georgecheng said...

Sorry can i know what does that means if warrant have

Premium/(Discount) (%) (Cash) -25.00

6:14 AM  

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