Warrants (Updated)5 Jul 2024 16:59
Here’s all anyone needs to know re warrants and share issue:
In the past fortnight warrants have generated $640,000. This is what remain:
0.025p = 856,000,000 warrants (excluding AC and Harvey’s small amount)
0.07p = 428,571,428
0.15p = 571,428,571
When converted they may bring in =
0.0025 = £214,000
0.007 = £300,000
0.015 = £857,143
Total potential Revenue Generated from warrants = £1,371,143
As with any new shares coming onto the market, to churn through the overhang caused by the new shares roughly 3 to 4 times the amount of shares need to be traded.
Last month alone, just over 13 billion shares have been traded. (That is more than the entire share issue for the entirety of the company 🤯)
LAST MONTHS VOLUME ALONE OF 13 BILLION SHARES IS ENOUGH TO CHURN THROUGH THE WHOLE WARRANT ALLOCATION IN ITS ENTIRETY.
This is by no means an anomaly in terms of volume with lots of News to come over the summer.
So to clarify with regard to warrants, aside from a temporary stunting of the share price when they may be converted, The positives seem to outweigh the negatives. They should generate significant revenues of £1.5m for the company that should ensure cash raise placings are not needed (as clearly stated by the CEO in the recent presentation)
Also, it is useful to understand there’s no guarantee that all of the warrants will be converted. I’ve held stocks where many warrants expire unconverted. So we either benefit from the revenue, or the lack of lag due to warrants expiring.
The 571,428,571 warrants at 0.15p expire 24/10/24, so unless the SP reaches around 0.3p (over 6x the current SP) then they’ll expire unconverted.
Also, the warrants are triggered in each increment once we achieve a certain price (0.07 & 0.15p etc) So they should be gradually drip fed into the market. However, as I’ve just demonstrated earlier in this post, even if all of the 3bn+ warrants were to be exercised tomorrow, the entire lot should be burned through in a few weeks at this level of volume.
So, I think we can all agree that the warrants, may stunt the SP temporarily, but they bring wealth and security to the company and compared to the volume we’ve seen recently and the large volume we should see over the course of the summer given the News items scheduled, they should be churned through very efficiently indeed.
Next week should see an increase in Volume as the Quarterly Report is out too.
I hope that helps.
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