Put Warrants The price reflects the essence of the perfect Money Tips

Category: Money tips Release Date: 2006-06-11

Major Holders and the other with Zhuanzeng current prices as compared to price of the warrants to the shareholders of tradable shares does not seem to be anything, non-tradable shares to shareholders to pay is also vague. But in fact, warrant price is right can best embody the essence of the value of the bids, in particular, is one of the put warrants will be tradable share reform and protection of the interests of shareholders had the perfect combination. Meanwhile, the warrant on the price also has broad applicability.

Put Warrants on the price reflects the core meaning

Stock price change on the core meaning of non-tradable shares tradable, the non-tradable shares tradable shareholders, the shareholders may, therefore, to compensate for losses suffered. In Major Holders and Zhuanzeng so as to send prices as the main feature of the way, has been circulating shares despite the stock or cash, but the assets they hold because the market may still suffer losses of natural ex. In fact, in this in order to send the right price for the features of the way, circulation, shareholders received compensation for more of a symbolic meaning, rather than shareholders of tradable shares are a solid way to pay the shares. One party to pay a lot, but the other did not receive tangible benefits in order to send the right price for the features manner and not very clear expression to the price of the core meaning.

And send different warrants on the price of the put warrants will not only reflect the price of the core meaning of very full, but may also form a non-tradable shareholders and tradable shares does not require much to pay the interest of shareholders have been fully protected the perfect situation. With Qingdao Haier's warrant to the price of, for example, the company Haier Group's non-tradable shareholders only get one share for every 10 shares, while 10 were 9 in accordance with the proportion of tradable shares to shareholders free of charge delivery of the exercise price of 4.39 yuan put warrants. As the company's prospects continue to be optimistic, and put warrants the use of securitization of the settlement payment, Haier Group's warrant is exercisable for a view may not need to take great risks to subscribe, or even does not rule out the possibility of zero subscription. Even if the subscription amount is not effectively controlled, extreme downturn in the market shares during the repurchase is actually a relatively good investment behavior. For tradable shareholders, the warrant in the delivery ratio of 10:9, the full circulation of the risk after the fundamental is locked. Haier Group, or to subscribe for the completion of the zero stock change, or by way of investment to complete share reform, and those high in comparison Major Holders of the company, Haier Group is actually not how much, but the circulation of the interests of shareholders by doing so they were well protection, which is embodied in put warrants on the price of the core meaning.

Has broad applicability

Warrants on the price of can solve many other methods are difficult to resolve on the price of the share reform problems, its applicability is on all fronts.

The application of high flow rate of the company. High flow rate of the shareholding company's non-tradable shares lower percentage change in the stock prior to its relative position Shangju controlling unstable, if we adopt Major Holders or Zhuanzeng right price to complete share reform, non-tradable shareholder's ownership percentage will be further reduced, In the full circulation of the market, the risk of being acquired at any time. For example, the largest shareholder of China Resources Shenzhen Vanke Co., Ltd. holds 12.89% only of the shares. According to incomplete statistics, the Shanghai and Shenzhen as Shenzhen Vanke flow rate is very high so a large number of companies. In the tradable context, the expectations of high flow rate of the deep Vanke's price with Major Holders as clearly not realistic. The put warrants for a high flow rate is just the company's share reform needs, this approach will not only not reduce the price of the non-tradable shareholders to equity ratio, but there is the possibility to improve.

For blue-chip companies. Is well known that the proportion of blue-chip companies Major Holders generally low, circulation shareholders are very unhappy about, instead of circulating shares is a large inverted grievances. The reason for this situation, mainly due to non-tradable shareholders of the company's profit outlook is very optimistic that the current share price, its return on investment is far higher than the average rate of return. Therefore, the non-tradable shareholders is not only unwilling to reduction, but a relatively strong desire to overweight. However, shareholders expect to be compensated in circulation is understandable. How to resolve this contradiction? The advantages of put warrants re-appear. Shareholders expect compensation for the outstanding shares of the underlying reason is that after full circulation fell anticipated that if the expected stock price drop does not exist, then the right price can be exempted completely. Put warrants although it can not resolve the expected fall in share prices, but they can help the circulating shares fell the risk of locking to avoid the possible existence of tradable stock price declines caused by the loss, while the holdings of a strong desire of non-tradable shareholders are also may be acceded to achieve the purpose of holdings at low prices.

In addition, warrants to the price of non-tradable shareholders also applies to communication difficulties, it is difficult to achieve the same company, both warrant or a put warrant, the first major shareholders can be alone. For with H-shares and B shares of the Company, warrants can also be completely without changing the H-shares and B shares under the premise of the interests of shareholders to complete share reform. Broad applicability of the warrant on the stock price will change to gain more and more important position.

Poor company may acclimatized

Warrants on the price is an advantage in a very obvious way on the price, but not applicable to all companies, most of the warrants does not apply should be the difference between future prospects are not optimistic about the company. Both warrant or put warrants, bad companies will be acclimatized. Look at the warrants. The company's future prospects are not optimistic about the stock up enough momentum, but also pays for re-circulating shares to buy the shares tradable shareholders warrants will have a huge aversion, especially in the depressed market, the shareholders of non-tradable shares circulating shares of any means for misappropriating those acts will have a great resistance. Circulating shares of the conflict is not a feeling of catharsis, but rather out of their own interests to protect. Look put warrants. For the circulating shares, as long as the right line to send the right price and the ratio is high enough, even bad companies would also be welcomed attitude. But for non-tradable shareholders, the use of put warrants as a price you can give it brings great risks.