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Tuesday, September 18, 2012

Company Warrants Expiring in 2012 - Actions Needed

I need to remind myself all the outstanding company warrants that are expiring in 2012 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.

ASJ W120221, Expiry Date: 21 Feb 2012, Exercise price = $0.04, Conversion ratio 1:1 - Warrants exercised and converted to shares.
UPP W120529, Expiry Date: 29 May 2012, Exercise price = $0.36, Conversion ratio 1:1 - Warrants expired worthless.
GOLDAGR EW120723, Expiry Date: 23 Jul 2012, Exercise price = $0.54, Conversion ratio 1:1 - Warrants exercised and converted to shares.
ROWSLEY W120921, Expiry Date: 21 Sep 2012, Exercise price = $0.10, Conversion ratio 1:1 - Warrants expired worthless.
NTEGRATORW121011, Expiry Date: 11 Oct 2012, Exercise price = $0.017, Conversion ratio 1:1 -Warrants exercised and converted to shares.
SHS W121015, Expiry Date: 15 Oct 2012, Exercise price = $0.23, Conversion ratio 1:1 - Warrants expired worthless.
PAN HONG W121027, Expiry Date: 27 Oct 2012, Exercise price = $0.66, Conversion ratio 1:1 - Warrants expired worthless.
AZTECH W121123, Expiry Date: 23 Nov 2012, Exercise price = $0.20, Conversion ratio 1:1 -Warrants expired worthless.

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11 Comments:

Blogger Everlearning said...

Hi ghchua,

I am impressed by the vast knowledge you have in regards to rights, warrants, etc that tagged along with shareholdings. You know what you need to do or not to do. But, I am clueless and at times felt intimidated.

I have RH Energy in my portfolio, and recently the Company offered the shareholders to buy warrants that entitled them to buy shares at $200 per lot. That is the way I understand it.

The problem is that the share is trading at $130 per lot today. Wouldn't it makes sense if I will to just buy it straight from the open market than to go through the complicated process of adding more shares?

I always felt so helpless when companies come up with rights, consolidations, and warrants. I just wonder how you handle all these?

1:49 AM  
Blogger ghchua said...

Hi Everlearning,

I think there is no short cut when deciding what to do with corporate actions like rights, warrants etc. You have to read the offer document and understand why they are raising the money, for what purposes, any undertaking or underwriters for the issue etc. Of course, price matters in the end and you have to decide how much rights (plus excess rights if you want more exposure) you wish to take up. Remember that there will be dilution to your existing holdings in the company if you don't take up rights issues.

Warrants do have time value and it might not be enough by just looking at the exercise price. I am not a shareholder of RH Energy, so I admit I didn't really follow the company. But from what you said here, it seems that it is a raw deal since the warrant exercise price is 7cts higher than its current share price. Have the rights entitlement started trading yet? If yes, how much is it trading at? That might give you an idea how much your rights is worth now and whether it is worth subscribing for the warrants.

If you don't wish to subscribe, you can try to sell your rights entitlements when it starts trading. They normally trade for only one week or so and you have to make your decision fast.

9:32 AM  
Blogger Everlearning said...

Hi ghchua,

Many thanks for helping me see the needs to respond to issues like these.

Oftentimes, my initial response towards such routine is negative. But, as you said, I must act fast and make decision whether to accept or not.

May you find love, joy and peace at Christmastime and the coming new year.

4:35 PM  
Blogger ghchua said...

Hi Everlearning,

Merry Christmas and Happy 2012 to you! May all your investments bear fruits next year.

8:17 PM  
Blogger Chutiphon.y said...

hi...
I would like to know in what condition would the company warrrant converted into shares? And what is the process?

6:57 AM  
Blogger ghchua said...

Hi Chutiphon.y,

Company warrants are normally converted by the holder themselves. They are confident of the prospects of the company and therefore they have decided to convert. Also, some might want to convert as the expiry date is approaching.

You can refer to the link below for the process when converting the warrant:
http://wealthbuch.blogspot.com/2010/09/how-to-exercise-your-warrant-options.html

9:19 PM  
Blogger Unknown said...

Hi GK, perhaps you are the first that i encountered investing with CPF onto funds and stocks....

i need to hear from you with regard to CPF-IS (OA) which i have now cash in hand.

My friend says to invest in fund houses that invests in China and Japan.

However, i don't like management and fees because prior to liquidating my Fund holdings which i started 4 years ago, in First State Dividend advantage and fidelity SEA A, the returns of fidelity were so poor and the FS Div Adv's dividends were 1% so far, under performing CPF OA 2.5%...

Hence i am looking to dividend rich stocks.

What is your advice?

12:23 AM  
Blogger ghchua said...

Hi Unknown,

I don't purposely try to invest into funds. CPF Board only allows 35% of your available funds for investments in stocks. Therefore, the remaining 65% (amounts above $20K) in CPF-OA can be invested in funds/ETFs to beat CPF-OA interest rate.

I believe that choosing the right portfolio of funds can beat CPF-OA interest rate. If you don't like high management fees, you can invest in ETFs or choose funds that have lower management fees.

I don't believe in investing in specific country like China or Japan. If you look at my unit trust portfolio at Fundsupermart, I diversify my holdings across regions and countries, with overweight position in some regions/countries that I am more positive. Currently, I have more money in S'pore (our home country) and Asia.

For my CPF stock portfolio, it is actually a small subset of my stock holdings invested using cash. Therefore, my best investment ideas are actually in my CPF stock portfolio.

5:44 AM  
Blogger Stock Shrimps said...

Hi ghchua,

I noticed you have Stamford Land in your holdings.

Would you be able to comment (from your relatively vast experience in stock investment) on the share buyback mandate that was passed in STL's EGM yesterday? As retail investors, what should we look out for? Pros and cons?

Thanks a lot!! :)

Cheers,

9:44 PM  
Blogger ghchua said...

Hi Stock Shrimps,

Share buyback mandate is one way to allow companies to enhance shareholders' value by reducing the number of shares out there. Companies also use the share buyback scheme to accumulate shares for their share option and share performance plans so that they do not need to issue new shares to dilute existing shareholders.

Pros:
1. Besides dividend payout, this is another way for the company to utilize its excess cash. It also sends a signal to the market that the board thinks that its shares are undervalued.

2. It can support the share price in the short term.

3. This will result in higher EPS (earnings per share) since there are lesser shares out there in the market.

Cons:
1. Share buyback will reduce the amount of cash available that otherwise could be distributed out to shareholders as dividend. Shareholders might prefer more dividend than share buyback.

2. It might artificially support the share price in the short term, and some might think the company has motive for doing so for other purposes like share placement at a good price etc.

3. It allows short term investors to exit the shares easily at a good price, since the company will be buying from them in the market.

2:44 AM  
Blogger GreenWorld said...

Very interesting information about all of those warrants. I guess i do not fully understand options and warrants. I wish I could work up the courage to use them, it would provide much more confidence for going into stocks.
farmland investment funds

2:41 PM  

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