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Tom Armistead
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I'm a well-informed retail investor and post on SA in order to expose my thought process to critical examination and comment from readers. It makes me a better investor. I'm particularly proud of bullish macro articles posted in 2009 and later, in which I presented ideas that encouraged me to... More
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  • TARP Warrants - What are they worth?  0 comments
    May 19, 2009 6:17 PM | about stocks: BAC, JPM, C, GS, MS

    Inspired by Ira Artman's Instablog on the TARP warrants and the cost to the banks to buy them back, I looked up Bank of America's warrants on their 10-K, then put the information into an options estimator at cboe.com, using yesterday's closing price and the volatility as supplied by CBOE.

    Bank of America, value of 10 year warrants with stock trading at 11.73

    Date Issued

    Shares (millions)

    Strike

    Value per share

    Total Value (millions)

    10/14/2008

    121.8

    30.79

    6.11

    744

    January 2009

    150.4

    13.30

    8.79

    1,322

    Total


     


     


     

    2,066

    BAC received 35 billion of TARP money, out of a total 350 billion made available to eligible institutions. If the warrants received from other TARP participants are equally valuable, then there is 20 billion taxpayers are entitled to.

    Stocks: BAC, JPM, C, GS, MS
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