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Tejon Ranch Co. Message Board

  • philmartin312@att.net philmartin312 Aug 24, 2013 11:24 AM Flag

    Warrants?

    Can someone explain to me the point of issuing warrants to the current shareholders? We already own the company so what is the benefit? Is getting the warrants a taxable event for us? Is this a management enrichment program somehow?

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    • Issuing warrants to current shareholders is shareholder friendly.
      At least twice before, the company issued purchase rights to existing shareholderd that I'm pretty certain were not tradeable.
      These moves are shareholder friendly because they offer the opportunity for existing shareholders to keep their percent ownership the same post the new shares being issued.
      Yes, the warrants should trade on the NYSE:
      "Tejon has applied to have the Warrants listed on the NYSE MKT platform under the ticker symbol “TRC WS” and anticipates that the Warrants will begin trading on the NYSE MKT on a “when issued” basis on or around August 19, 2013."
      I just checked to see if the warrants are trading in the WI market, but not so far, from what I see.
      One thing I noticed re these warrants compared to a couple other warrants I own or have owned is that they can be called early by TRC:
      " The Warrants will be exercisable through August 31, 2016, subject to the Company’s right to accelerate the expiration date under certain circumstances when the Warrants are in-the-money."

      • 2 Replies to wooglin_kai
      • These warrants are showing a price of $4.06 in my account. If that is correct, given their terms, they are a screaming SELL. They are basically worthless, given the exercise price and the call features. Believe me, if by some remote chance they ever get in the money, they'll be called. This is a very weak, and outdated attempt by a stultified management to throw a bone to the shareholders without spending much money. If management doesn't start doing something to realize shareholder value soon, some activist investor will do it for them and throw them all out. It is long overdue. Management has run this company as their own private fiefdom for far too long.

        Sentiment: Hold

      • " called early by TRC"
        "called" may not be the correct word choice, but you should get the gist.

    • Is there a forward (when issued) market for them? What's their current quote?

      • 1 Reply to jefatkinson
      • Realistically, given the low volume of the stock, the warrants will probably trade, if at all, by appointment only. If these were 3 year leap options and basically 10 points out of the money with a low volume underlying stock, I think they'd be worth, maybe, at most, a buck or two max. Anything more is a gift and they should be sold immediately. Their intrinsic value is very very low.

        Sentiment: Hold

 
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