GM Warrants - A Better Buy Than GM Common Stock [View article]
I would expect a dividend announcement to decrease the price of warrants because the mechanics of paying a regular dividend means the share price will be regularly adjusted down. You do have a good point that the shares would probably rally on such news though.
You can see this same thing happening now. When a new dividend is announced by a company, long term calls on that stock decrease in value. I expect the same thing would happen on the warrants.
I don't have specific information on most of the warrants listed. I have written articles about several different bank warrants.
To get information on other warrants, the best place is the SEC registration documents (they can be pretty hard to understand sometimes) and articles others have written.
The warrants are listed under a variety of symbols. On yahoo finance, they are listed as BAC-WTA & BAC-WTB. On marketwatch.com, they are listed as BAC.WS.A & BAC.WS.B. It can be hard to figure out what warrants are actually out there, but here is a list of the warrants trading on the NYSE: http://bit.ly/11c6pck
No, since the warrants are a different instrument, they are not treated the same way as LEAPs or calls with respect to collateral on covered positions.
Freeport Is Close To Long-Term Support [View article]
Yeah, there are numerous arguments on both the bull and bear side of the stock. With that said, around current levels the stock presents an interesting risk-reward based on the past few years' price action.
Due to the abundance of bear arguments, a stop around the 2010 lows makes sense.
Freeport Is Close To Long-Term Support [View article]
I obviously disagree. I do think that FCX provides a clear stop which is the 2010 low of just above $28.00 (as others have mentioned on SA). Using that, I'll cut my losses incase you are right.
Blackrock Kelso Capital - A Well Run And Focused Investment Firm [View article]
I think you are referring to a long-running debate on what bucket money dividend come from for MLPs and BDCs (capital raises or earnings). Because of the amount of time the debate has been running, I don't think I will convince you either way but . . .
I would agree that in 2008 you could say there was simply a return of capital since the book value dropped. But since then, the book value has stayed relatively constant. Since the book value stayed constant, there was not a return of capital but paid out earnings.
If you are referring to the capital raise the company did in 2010, I still disagree. If there was a return of capital, the NAV per share would still drop, which it hasn't.
Citi Stock And Warrant Returns Relative To Book Value - Part III [View article]
You are right about the math of dividend adjustments though you have to take into account the 10:1 reverse split. That makes the dividend adjustment threshold for the Series A warrants $0.10 per quarter.
You are right, if you assume a divided of $0.40 per quarter in the next year or two, the strike can get adjusted down pretty considerably.
Wells Fargo Stock And Warrant Returns Relative To Book Value [View article]
I'm glad you like the analysis!
I do, however, believe that this is a 'middle of the road' scenario. Over the next 6 years I'm assuming there will be no recession and I'm assuming that banks can be profitable enough to earn similar valuations they have had in the past in light of new regulations.
You do outline several items which could really benefit the shares if they come to fruition. If those items do happen, the analysis above would probably be too conservative.
BAC Stock And Warrant Returns Relative To Book Value - Part II [View article]
Yes, warrants trade like options where there are two components which make up the price - time value and intrinsic value. The link below has more info on this topic.
Yes, you can trade in and out of them all you want (like options) but what determines the price of the instrument is the sum of time and intrinsic value.
BAC Stock And Warrant Returns Relative To Book Value - Part II [View article]
You can trade them on any platform. They don't have consistent symbols between platforms though. Some platforms call them out as BAC.WS.A, BAC/WS/A, BAC.WSA, etc. It takes some looking to find out where they are sometimes.
AIG Stock Vs. Warrant Returns Relative To Book Value - Part I [View article]
Yes, I used a 3.5% growth in book value to be conservative. Also, if you use a more aggressive growth rate, like 7%, the returns on the warrants begins to look unbelievably high.
Hartford Warrants - Leverage On A Cheap Stock [View article]
GM Warrants - A Better Buy Than GM Common Stock [View article]
You can see this same thing happening now. When a new dividend is announced by a company, long term calls on that stock decrease in value. I expect the same thing would happen on the warrants.
Warrants - Like LEAPs But Better [View article]
To get information on other warrants, the best place is the SEC registration documents (they can be pretty hard to understand sometimes) and articles others have written.
Warrants - Like LEAPs But Better [View article]
It can be hard to figure out what warrants are actually out there, but here is a list of the warrants trading on the NYSE:
http://bit.ly/11c6pck
Warrants - Like LEAPs But Better [View article]
Freeport Is Close To Long-Term Support [View article]
Freeport Is Close To Long-Term Support [View article]
Due to the abundance of bear arguments, a stop around the 2010 lows makes sense.
Freeport Is Close To Long-Term Support [View article]
Blackrock Kelso Capital - A Well Run And Focused Investment Firm [View article]
I would agree that in 2008 you could say there was simply a return of capital since the book value dropped. But since then, the book value has stayed relatively constant. Since the book value stayed constant, there was not a return of capital but paid out earnings.
If you are referring to the capital raise the company did in 2010, I still disagree. If there was a return of capital, the NAV per share would still drop, which it hasn't.
Citi Stock And Warrant Returns Relative To Book Value - Part III [View article]
You are right, if you assume a divided of $0.40 per quarter in the next year or two, the strike can get adjusted down pretty considerably.
Wells Fargo Stock And Warrant Returns Relative To Book Value [View article]
I do, however, believe that this is a 'middle of the road' scenario. Over the next 6 years I'm assuming there will be no recession and I'm assuming that banks can be profitable enough to earn similar valuations they have had in the past in light of new regulations.
You do outline several items which could really benefit the shares if they come to fruition. If those items do happen, the analysis above would probably be too conservative.
BAC Stock And Warrant Returns Relative To Book Value - Part II [View article]
Yes, you can trade in and out of them all you want (like options) but what determines the price of the instrument is the sum of time and intrinsic value.
Hope that answers your question.
http://bit.ly/10svguD
BAC Stock And Warrant Returns Relative To Book Value - Part II [View article]
BAC Stock And Warrant Returns Relative To Book Value - Part II [View article]
AIG Stock Vs. Warrant Returns Relative To Book Value - Part I [View article]