The warrants are a great way to raise capital but the catch 22 is that the stock price won't go into the territory needed for this to happen as they act as a ceiling on the price. Management is apparently trying to make something fairly simple very complicated. Simply offer a conversion of the warrants into common with a few kickers. Warrant holders would provide the warrants and some cash for a common shares with a slight premium to encourage maximum conversion. This would take 80-90% off the market and dilute the common only modestly. The warrants are generally held in a few hands as evidenced by the Board members 9 million of them so this would be successfully subscribed to. In the meantime the company seems to be selling well below NAV with growing dividend stream. Management competence will come into question if they can't solve this by year-end.
$12 warrant stock price $11.50 after secondary at $10.75 warrant $0.70 exp date oct 2014 represent a cheap leap if stock goes to 15 warrant worth $3.00+ great leverage .70 t0 $3.00 compared to stock $11.50 to $14.00...ROIC can force exercise of warrant if stock price reaches $18.75...ROIC gets $6.75 per warrant ....warrant +$6.75 buys a share
Stock about to hit all-time high, but not the warrants. Dilution via secondary, hit these things but it still doesn't jive. One has 2 years, 10 months before these warrants expire. Currently, Jun12 $12.50 options trade for $0.25. With a strike price of $12 for warrants, they should trade at north of $0.75 since they additionally have 2+ more years left than the Jun12 options. Folks must feel strongly that this company will plateau out in price and just not be able to go above $12.50-$13.00 range in next 3 years. Any options experts that can shed a light on warrant pricing here?