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late last year and early of this year, there is a prominent pro investor and his prominent friend that bought huge qty of warrant C and sold it out after two three months. many of their followers benefited from the rise. probably some got stuck until now. it's unfortunate but that's the risk of warrants with high leveraging.
William, it's not an easy task as identifying warrants intrinsic value requires some future forecast of it's mother share value before it's expiry date. right now, mother share is below the exercise value. depending on your forecast of it's mother share value, delta between it and it's exercise value gives you an estimate of the warrants intrinsic value. Just my opinions, could be wrong.
the warrant become no value because double negative impact;
1. By continous reduction of mother share value
2. increamental exercise is coming. Plus at before increamental already warrant traded on huge premium toward declining mother shares.
however, I am confused. Do u know how the increased exercise price will affect the value of a warrant? why it is not recommended to hold for this situation? appreciate if you could kindly explain, i'm newbie here
ng zhee jing, the exercise price means you need to pay for RM 1.12 in order to convert the warrant to mother share.
This exercise of RM1.12 exclude the price that you bought.
If you bought at RM 0.27 ,means you will only get profit if the hisbiscus mother share raises above RM 1.39.
Take note that the hib warrant will be expired on 2021, after the expired date, the warrant become useless.
So if you are confident on the Hibiscus'future growth. I recommed you to buy mother share
