Talk & Talk
Prolexus’s Warrant (8966WA) still worth buying at this stage?
PRLEXUS-WA:
Exercise ratio = 1:1;
Exercise value = RM1.20;
Current share price = RM0.89
The price required to convert to the stock
= ( warrant price ✘ ratio ) + Exercise value
= ( 0.085✘1) + 1.20
= 1.285
The price for the warrant to be converted into shares is RM1.285, but according to the 23/3/21 mother stock price of RM0.885, there is a premium of RM 0.395, which means that the price of the warrant to be converted into shares is more expensive than buying the shares directly in the market.
How to calculate premium%?
Formula = [(warrant price✘ratio) + Exercise value – Shares price ] / Shares price
Premium % = [(0.085✘1) + 1.20 - 0.89] / 0.89 = 44.38%
In other words, it is 44.38% more expensive to convert into shares with warrant than buying the shares directly in the market.
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