Marlin Warrants MLNWD

[tim23]

Purchased today @ 4.9, given likely exercise price of about 87c in 12 months time happy to tuck these away.

[Beagle]

Purchased today @ 4.9, given likely exercise price of about 87c in 12 months time happy to tuck these away.

I think its more likely the exercise price will be 86 cents this time next year. I also bought some at 4.9 cps today.
Fair value according to my modelling is 3.5 - 5.5 cps. I would rather have bought towards the bottom of that range but some other investor was keen and I wasn't going to miss out on an establishing a foothold.

[oldtech]

Sorry if this is an silly question, but how do warrants work?

From what I have read, Marlin issues warrants to existing shareholders, which gives those holders the right to buy more shares in Marlin in one year (6 November 2020 to be exact). But as they are being traded on the NZX, I guess this means that shareholders can freely sell those warrants. Question is, what happens in one year's time on the 6th of November? If I buy those warrants, does this give me the right to buy shares? And at what price?

[stones]

Yes. The price will be determined about a month before the exercise date. See Beagles post above re pricing.

Sorry if this is an silly question, but how do warrants work?

From what I have read, Marlin issues warrants to existing shareholders, which gives those holders the right to buy more shares in Marlin in one year (6 November 2020 to be exact). But as they are being traded on the NZX, I guess this means that shareholders can freely sell those warrants. Question is, what happens in one year's time on the 6th of November? If I buy those warrants, does this give me the right to buy shares? And at what price?

[Beagle]

https://www.marlin.co.nz/assets/Investor-Centre/Marlin-Global-Warrant-Terms-2019.pdf Please read the attached warrant terms and if you have any more questions I am happy to answer them.

[oldtech]

Thanks Beagle - I had found a brief summary on Marlin's site but didn't locate this document for some reason.

Reading glasses on!

[Beagle]

Got my snout in to more of these beauties late this week. Good thing is you outlay just ~ 5.5 cents and gain exposure to the upside of a share with a current NTA of over $1 and if the market goes gangbusters you gain all the upside on ~ $1 worth of NTA https://www.cnbc.com/2019/11/15/market-listens-when-officials-repeatedly-tout-progress-on-china-trade.html
If the custard hits the fan with the trade talks your maximum downside is just 5.5 cents, not the potential 20-40 cents the shares might drop in a nightmare all out trade war situation. Warrants therefore embody some very good optionality to them even if said optionality is difficult to price.
I'm taking a break from buying these for a while so the opportunity is there...

[tim23]

Have bounced off their lows but now look compelling value when you guess the conversion will be about 87c. Disc hold these and ords

[Beagle]

Have bounced off their lows but now look compelling value when you guess the conversion will be about 87c. Disc hold these and ords

You must be a psychic mate, I was just thinking that today. I still think the conversion is going to be 86 cents. Almost certain to have paid 8 cents in dividends before the conversion date in November so 94-8 = 86 cents exercise price and last weeks NTA was over $1.01. Hmmm

Kingfish warrants with a March 2021 conversion are starting to looking interesting too. I have a few of those as well. I like the optionality warrants confer.
Bought a few Barramundi shares today. Am expecting a warrant issue for them in the next couple of months.