Our website is made possible by displaying non-intrusive online advertisements to our visitors.
Please consider supporting us by disabling or pausing your ad blocker.
No. Covert to mother share to generate cash. When warrant is converted, the chairman gets mother share for cheaper price plus the 4 ringgit per share exercise value goes to the company.
When warrant are converted.. the company gets capital to pay debt or investment. Frontken has not much debt. So they'll use the capital for expansion. At the same time. Warrant circulating in the market will be lesser. If demand stays the same or goes up..warrant price will go up
If chairman’s goal is to collect more shares he would just buy it from open market. But the money goes to whoever selling. Frontken was buying back shares to push it back above 4.00. The warrant chairman warrant convert to mother share and exercise value of 4 ringgit per share goes to raise capital. Warrant doesn’t go to waste. Chairman gets mother shares for lower price. Money he used to exercise goes to the company. Unlikely chairman will be dumping warrant.
“Frontken was buying back shares to push it back above 4.00.” --- this sentence attracted my attention, and i believe the logic behind it. the problem is how long can other warrant holders wait? the expired date is may next year, if you want to convert, you need 4 months to execute, is that correct? this actually shorten the warrant life.
Two week’s maximum for conversion. Observe the mother share. Too many retailers holding frontken warrant. I think that’s why mother share is being suppressed. You see KGB-wb. Same expiration date.
But KGB mother share is way beyond the warrant strike price that's why the price is so stable, Frontken mother share price cukup makan sahaja anytime can kelong, that's why warrants so shitty
given the same other variables except the strike price, otm warrant tends to have much much lower premium compare to itm warrant because it has no intrinsic value.
This is especially true when it is getting close to the expiry and during the bear market. Hence it has completely lost sync with mother share price since a few months ago...
