for the google impaired.
if i'm reading this correctly, they're getting $5M total for the 3.346M shares(priced at $1.494) AND the 1M warrants for 2.12M shares. This to me suggests that the warrants are essentially free?? What the fudge kind of deal is this....
Warrants are options...you pay for the right to be able to buy shares in 3 years time for $2.12. So if you think the shares will be worth $5 in 3 years, then assuming you paid $0.50 to buy the warrant today, you will have paid $2.12+$0.50 for each share upon exercise in 3yrs, then you flip at $5.
There is value attributable today for such warrants, that's why people buy and sell options.
If you read my previous posts, I am clearly a long on this, but these types of financing arrangements drive me insane.
I'm not saying he actually would sell them, I'm saying the warrants themselves have value today which, to me, doesn't appear to be reflected accurately in the deal.
Let's reverse my scenario, instead of selling the warrants, let's say the investor decides to sell the shares today and keep the warrants. At today's share price, he would actually clear a proft on his shares to the tune of approx $900k, and his warrants give him a freebie chance to cash in if the shares go above $2.12 in 3 years.
I'm emailng investor relations on this...there had better be some lenghthy no-sale provisions on the shares and warrants (as a private placement, there should be something in place).
2.62, that sounds to be about your last buy in price for this turd. How are your 2.62 shares treating you today? You should have bought options @ 50 cents each to buy them at 2/share if you felt that good about their chances...lol
If this seems outrageous to you it's because you have failed to grasp where that excess $ equity value is coming from: current shareholders.
It's called Dilution. Shares are printed and sold, in effect carving a small piece out of every existing shareholder position and giving it to the new investor, who gives cash to the company so it can keep the doors open. It's what a no-revenue "company" like Microvision has to do to stay in "business."
Why else should anyone put $5 million into Microvision? As with the repeated Azimuth drawdowns, these people do not expect MVIS to succeed -- they are able to make $ on the immediate deal. The warrants are probably just window-dressing to provide an illusion to current investors that "someone" at least believes in the company.