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Silver Wheaton Corp. Message Board

  • robvaldor robvaldor Oct 24, 2005 11:09 PM Flag

    Warrants Question

    Do warrants become worthless if a company is taken over for cash under the in the money price.

    With the Goldcorp-Wheaton merger the warrants lived on but what typically happens?


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    • If the warrants are called in you MUST respond by either converting them to common or selling them before the date or else they can become worthless.

    • "Do warrants become worthless if a company is taken over for cash under the in the money price."

      Nope, they will remain in effect ...

      Technically, the acquiring company could just buy the shares and retire them and cancel the company charter and the warrants would be worthless ...

      In reality, any company that tried that would be shunned by the public financial markets and would never be able to raise cash again ...

      Usually the major warrant holders are the large funds and institutions that received them as the "bonus" for taking down part of a financing and there is no public company out there that would dare shaft the funds and institutions in that manner ...

      Even though they may be out of the money, they will generally be converted into warrants of the new company, like WHT into GG warrants ...

      It's not a concern ...


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