IFT - Infratil

[Toddy]

Footsie

What kind of volumes did you buy (obviously worth boasting about)

[CJ]

quote:Originally posted by Footsie

i bought my warrants at 75c back in late 2005

sorry just felt the need to boast!

Well IFT gave me some for free!!! Unfortunately not enough so I topped up at 91c sometime in the past 12m I think.

[Toddy]

There is something up with IFT. The SP movements today were unusual.

Buyers at $5.61.

If there is something in the behaviour then we could be in for a few interesting days ahead.

[Caesius]

Spotted this one too. Average email update and then this price movement.

[Caesius]

8 minutes in and buyers at 5.65

[Caesius]

This never ceases to amaze me; heads @ $5.7, warrants at @ $2.3.

A massive 10c rise in heads predicted.

[gisborne_gold]

Caesius are you referring to the relationship between the warrant price and heads price?

One could equally predict a drop in the warrants to bring things back into alignment?

[Toddy]

Gisborne Gold

You are forgetting sbout the cost of capital on the leverage. Money is no free. The warrants are significantly underpriced at $2.30.
On confirmation that the head SP will hold at these levels then the warrant will jump approx 15 cents before close today (or there abouts).

[gisborne_gold]

Thanks Toddy. There wasn't a lot of science in my previous post, I hadn't quite understood what Caesius was getting at and was hoping for a clarification as to what it was that was amazing.

Intuitively I would have said the same as you, that the warrants are undervalued relative to the heads but I hadn't got as far as doing a valuation calculation to substantiate it.

[gisborne_gold]

OK I took a proper look at what Black-Scholes might give me as a value for IFTWB.

If I adjust for the IFT dividend yield and the dilutionary effect of the warrants I calculate a valuation for IFTWB in the $2.12 to $2.20, which is below current buy bids which sit at $2.34. Is IFTWB in fact over-priced, contrary to what we've been saying?