Warrants are free but price will be quote at least 25 sen when listed because the strike price is RM1 and the share price is 1.25RM. So the 2 warrants you get if you sell them at 25 sen are worth 50 sen (at least) in your pocket on day one. But you also get 1 RPS with a 4% dividend that will return you RM1 at maturity or earlier that you paid only 50 sen for (RM1 less the 50 sen you got back for free for selling the 2 warrants).
But if the warrants sell at a premium of say 50 sen instead of 25 sen than if you sell them at that price your rps are then FREE. You will be getting 4% on a FREE investment ! How good is that manz !!!
I hope this is clear enough cause it is a bit complicated but easy to grasp with a basic understanding of warrants and how they work,
notebook: even if rps is not convertible you will get back a guaranteed rm1 at maturity and if you sell the warrants to pay for half of the purchase the rps will cost you only 50 sen and yield a dividend of EIGHT percent on your outlay ! Where are you going to get that kind of dividend yield!
Everybody bitching here about Insas dividen and now you have a chance to get EIGHT percent !!
lazycat: we do not know but i expect it to rise in advance and perhaps drop a bit after. ccs999: yes. this is not stated that i saw. but i don;t care as i will take 8% (assuming i sell the warrants to pay for half the RPS) as long as i can get it !
my perception is mother price wont be adjusted upon ex-right date since it is not an equity instruments (RPS is not convertible, but just like a debt).
Just my guess. Can anyone confirm? for those who had counters with free bonus warrants, like xinquan.
I also think the RPS will sell at a premium to RM1 with a market price guaranteed dividend of 4% which is higher than bank non-guaranteed interest at he moment so you may just be able to sell the rps early and make an even bigger immediate profit if you don't want collect the 8% dividend over time.
I simply can see nothing but GOOD coming from this for insas shareholders.
Without the conversion feature attached to RPS, I believe the market price of RPS may be adjusted to the region RM0.90 so as to have effective yield of 4% to 5%, to reflect market interest rate of a corp bond.
kful: Yes and that means an 8% dividend on the 50 sen price of the RPS if you pay for half of the RM1 cost with a 50 sen free profit from the warrants sold at 25 sen which is the minimum price they will ever sell at unless the insas main share price drops well below rm 1.25.
Is that possible that, they pump in the money to M&A then the director can use it as margin to subscribe Inari Right? For the 60M? And another 30M subscription through Insas?
Another thing to note is the RPS may be surrendered by the Warrant holders at 100% of the issue price of the RPS for the exercise of the Warrants in lieu of the exercise price of RM1.00 per Warrant. So the flexibility is there and if Insas share price still stays above 1.25, then RPS will be RM1.00. If there's a discount in RPS price, people will buy RPS and warrant to convert to mother.
HAHAHAHAHAHAHAHAH ..... pay RM 1 and get 1 RPS 4% p.a. + 2 FREE WARRANT with x-price RM 1 .... HAHAHAHAHAHAHAHAHAHAH somemore insas intrinsic value worth more than RM 2 .... WOW !! HAHAHAHAHAHAHAHAH .... king insas leno the most panlai investor has been laughing NON-STOP since the announcement .... HAHAHHAHAHAHAHAHAHAHAH HAHAHAHAHAAAHAHAH ... TIMA KACIH PETER LYNCH ! TIMA KACIH BENJAMIN GRAHAM ! TIMA KACIH to ALL THE VALUE SUPER-INVESTOR !! TIMA KACIH ! TIMA KACIH !!! HAHAHAHAHAHAHAH !!!!!
I expect Insas to strengthen on this news but not too much because thge approvals are not in place and it will not happen for months. Once it is approved and a done deal I then expect a bigger bigger move up. I would be a buyer here for sure.
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Posted by notebook > 2014-07-25 22:49 | Report Abuse
if the rps is convertible , the share will rocket launch
the problem is not convertible