很好的分析，买窝轮前。。。应该看看。。。
Friday, April 15, 2011
QL Warrant - a case study
Let us study the QL warrant and you make your own conclusion.
QL Share price is RM3.17.
QL Warrant price is RM0.93.
QL warrant exercise price is RM3.30 and the expiry date 13/02/2013, which is less than two years from now.
Four Scenarios at Expiry Date and how much QL warrant worth.
1) QL share price is lower than current price of RM3.17
Then QL warrant will be worth zero
2) QL share price same at RM3.17.
Then QL warrant will be worth zero.
3) QL share price up 30% to RM4.12.
Then QL warrant will be worth RM0.82, less than current price of RM0.93
4) QL share price up 60% to RM5.07.
Then QL warrant will be worth RM1.77, that is 90% from current price of RM0.93
If you hold QL warrant, and QL share price goes up 30%, you still lose out on the warrant.
Base on the above, unless QL share price goes up substantially, you will lose out if you hold on to QL warrant.
But if you switch from QL warrant to QL share, and if QL share prie goes up 60%, you may not enjoy the 90% gain, but you still can enjoy the 60% gain plus dividend.
If I have confidence in QL share, I will prefer to hold QL share rather than the QL warrant. The reward may be lesser, but the risk is much lower, considering the warrant will expire in less than 2 years.
What is the exception? Exception to my decision will be, the extension of the expiring date of QL warrant. I have no idea whether the expiry can be extended or not.
This is more of a case study.
QL Share price is RM3.17.
QL Warrant price is RM0.93.
QL warrant exercise price is RM3.30 and the expiry date 13/02/2013, which is less than two years from now.
Four Scenarios at Expiry Date and how much QL warrant worth.
1) QL share price is lower than current price of RM3.17
Then QL warrant will be worth zero
2) QL share price same at RM3.17.
Then QL warrant will be worth zero.
3) QL share price up 30% to RM4.12.
Then QL warrant will be worth RM0.82, less than current price of RM0.93
4) QL share price up 60% to RM5.07.
Then QL warrant will be worth RM1.77, that is 90% from current price of RM0.93
If you hold QL warrant, and QL share price goes up 30%, you still lose out on the warrant.
Base on the above, unless QL share price goes up substantially, you will lose out if you hold on to QL warrant.
But if you switch from QL warrant to QL share, and if QL share prie goes up 60%, you may not enjoy the 90% gain, but you still can enjoy the 60% gain plus dividend.
If I have confidence in QL share, I will prefer to hold QL share rather than the QL warrant. The reward may be lesser, but the risk is much lower, considering the warrant will expire in less than 2 years.
What is the exception? Exception to my decision will be, the extension of the expiring date of QL warrant. I have no idea whether the expiry can be extended or not.
This is more of a case study.
