Kflwh

[mshierlaw]

Currently the guestimate exercise price + warrant price is < KFL SP today. (which is < than nav)

You must be thinking the market is in for a big pullback? And no doubt you have positioned yourself accordingly

My crystal ball has never worked, but based on todays prices and historical dividends.....

Head shares $1.35 with expected 11c dividend before warrant excise date = net cost $1.24
Warrant 7c + expected excise price $1.26 = net cost $ 1.37

Note net cost is at excise date
If dividends change both lines same amount.
If share price goes up warrants look much better.
Fees are significant unless your buying by the truckload. Not my style.

I will exercise my allocation if it makes sense at the time & look at buying some more head shares.

[alokdhir]

All holders were allocated 1 for 4 KFL shares held, warrants KFLWH ...which some are assuming to be free and ready to sell at any price ...

In fact these are insurance against future dilution in NAV of their held KFL head shares .

Only in case of they going worthless ie market SP of KFL on 26th July 2024 is less then offer or exercise price of around $ 1.25 / 26 they will be better off then the holders who held on to their warrants till last month to see what effect they may have on NAV of their held KFL shares .

It seems many are taking a bearish view of markets 13 months hence are happy to sell at current prices ....if markets do some recovery and NAV dilution is more then what price they are getting now then they will be losers as their KFLs nav will get more diluted then what they got out of current sales of warrants .

Maybe many dont understand the final mechanisms of these warrants when they get exercised .

If view is that KFL sp will be below exercise price thus no dilution will happen then ONLY selling them at any price makes sense but if by any chance dilution is more then proceeds of the warrant sale then its a loosing proposition ...at current price of 7 cents ...it covers dilution of less then 2 cents !!

[ronaldson]

All holders were allocated 1 for 4 KFL shares held, warrants KFLWH ...which some are assuming to be free and ready to sell at any price ...

In fact these are insurance against future dilution in NAV of their held KFL head shares .

Only in case of they going worthless ie market SP of KFL on 26th July 2024 is less then offer or exercise price of around $ 1.25 / 26 they will be better off then the holders who held on to their warrants till last month to see what effect they may have on NAV of their held KFL shares .

It seems many are taking a bearish view of markets 13 months hence are happy to sell at current prices ....if markets do some recovery and NAV dilution is more then what price they are getting now then they will be losers as their KFLs nav will get more diluted then what they got out of current sales of warrants .

Maybe many dont understand the final mechanisms of these warrants when they get exercised .

If view is that KFL sp will be below exercise price thus no dilution will happen then ONLY selling them at any price makes sense but if by any chance dilution is more then proceeds of the warrant sale then its a loosing proposition ...at current price of 7 cents ...it covers dilution of less then 2 cents !!

Maybe, but many holders of KFL are simply interested in income derived. For them selling is a windfall. And many will also not wish to find the $1.25 exercise price so quitting is logical especially when the alternative of continuing to hold is essentially an ongoing gamble against Mr Market.

[mshierlaw]

Maybe, but many holders of KFL are simply interested in income derived. For them selling is a windfall. And many will also not wish to find the $1.25 exercise price so quitting is logical especially when the alternative of continuing to hold is essentially an ongoing gamble against Mr Market.

If I sell my warrants at today's price my current fee structure will eat up 15.5 % of their current value.

DISC not a large holder of this share.

[bull....]

Maybe, but many holders of KFL are simply interested in income derived. For them selling is a windfall. And many will also not wish to find the $1.25 exercise price so quitting is logical especially when the alternative of continuing to hold is essentially an ongoing gamble against Mr Market.

exactly my sentiment.

Anyway i see it as also you have a company that earns roughly 9 mil in income but pays out 30 mil in expense therefore no wonder the stock price is not moving up as they have to keep selling there assets to fund dividend's and there fee's

lose lose for investors unless there portfolio go'es berserk on the upside and that's the punt you have to work out how much the portfolio need go up to cover the expense's and hence stop the continual fall in nav due to cash leaving the business

anyway i view the warrant issue as an attempt to get new capital to then pay it back to you as div's if the status of things remain the same

[alokdhir]

Maybe, but many holders of KFL are simply interested in income derived. For them selling is a windfall. And many will also not wish to find the $1.25 exercise price so quitting is logical especially when the alternative of continuing to hold is essentially an ongoing gamble against Mr Market.

If u buy Insurance then U always have choice to be " Uninsured " and save the premium and take your chances ...thats what is Warrant to KFL share holders ...Insurance against depletion of capital ie NAV ...

Short term thinking or lack of understanding of its mechanics can lead people to think they are better off selling them ...but chances are very bright they will be the ones financing subsidised purchases of others in KFL when they get exercised in July 2024

If people hold KFL as term deposit for regular income then exercise of warrants in future can lead to depletion of capital out of your term deposit ...thats why one need to hold them till close to expiry as insurance against your interest in KFL ....best case is to exercise them by bringing more funds to keep your original capital safe ...small gains possible as not all get exercised ...or if one cant bring new funds then hold till last month by when a clear picture would have emerged how much depletion will happen and one can sell at similar price in market at that time to recover that capital erosion due to forth coming exercise .

Selling now one is speculating that market will not recover etc ...like one can speculate no earthquake will come etc thus no need insurance

So imo its not choice of warrant holders to sell now ...its their speculation or lack of understanding what happens when they get exercised at say $ 1.25 when NAV is say $ 1.60 ...the sellers now will be financing the difference in nav of new purchasers ...as they will be getting KFL of nav $ 1.53 at $ 1.25 ...if one had sold at say 7 cents currently then he looses 7cents - 1.75 cents he gets now = 5.25 cents net loss per KFL possible ...as dividend / income is based on nav thus his income will also drop ...so he cant offer this excuse too ...its like capital of term deposit getting reduced thus will its income

[winner69]

If u buy Insurance then U always have choice to be " Uninsured " and save the premium and take your chances ...thats what is Warrant to KFL share holders ...Insurance against depletion of capital ie NAV ...

Short term thinking or lack of understanding of its mechanics can lead people to think they are better off selling them ...but chances are very bright they will be the ones financing subsidised purchases of others in KFL when they get exercised in July 2024

If people hold KFL as term deposit for regular income then exercise of warrants in future can lead to depletion of capital out of your term deposit ...thats why one need to hold them till close to expiry as insurance against your interest in KFL ....best case is to exercise them by bringing more funds to keep your original capital safe ...small gains possible as not all get exercised ...or if one cant bring new funds then hold till last month by when a clear picture would have emerged how much depletion will happen and one can sell at similar price in market at that time to recover that capital erosion due to forth coming exercise .

Selling now one is speculating that market will not recover etc ...like one can speculate no earthquake will come etc thus no need insurance

So imo its not choice of warrant holders to sell now ...its their speculation or lack of understanding what happens when they get exercised at say $ 1.25 when NAV is say $ 1.60 ...the sellers will be financing the difference in nav of new purchasers ...as they will be getting KFL of nav $ 1.53 at $ 1.25 ...if one had sold at say 7 cents currently then he looses 7cents - 1.75 cents he gets now = 5.25 cents net loss per KFL possible ...as dividend / income is based on nav thus his income will also drop ...so he cant offer this excuse too ...its like capital of term deposit getting reduced thus will its income

It is very s complicated eh alokdhir …..seems a heck a lot of financial engineering going on ….no wonder Directors want a pay rise

You didn’t factor in what management fees will be over the next year

[alokdhir]

It is very s complicated eh alokdhir …..seems a heck a lot of financial engineering going on ….no wonder Directors want a pay rise

You didn’t factor in what management fees will be over the next year

That is already written ...can be more if they perform better than expected ...that no one grudges ....if u do well then u get paid more

PS : Was just trying to explain the NEED to hold them till maturity if u plan to hold KFL ...... Otherwise one can end up making someone else RICH

Like KFLWF series someone sold at 3 cents and near maturity they were worth 45 Cents ...he lost 9.75 Cents of NAV of his KFL

[winner69]

KFL share price value (in theory) is NAV less present value of future management fees

[alokdhir]

KFL share price value (in theory) is NAV less present value of future management fees

In normal times ...11% premium cant be explained in that manner ...so it has element of market sentiment also imbibed