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options are better than warrants, i dont like the warrants at all
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King,
could you take a moment and explain why you don't like warrants versus options? I don't know options at all really and am interested in the advantages.
thanks.
m"Whatever you can do or dream you can , begin it. Boldness has genius,power and magic in it." GoetheComment
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the warrants are for suckers...........
this is a little dated written last year but you will get the idea !!!
Once and for all, let iron out the great mysterious puzzle that is the ELANZ warrant.
With the less sophisticated investor in mind, the following will be demonstrated via the characters of Abbott and Costello in the form of cartoon mice:
Lou: Hey Abbottttt!!! I just bought some ELANZ warrants today. Got them for today’s closing price of $1.07 per warrant. I’m going to be rich!!!
Bud: (Slapping Lou across the face): You numbskull! What the heck did you do that for? Don’t you know that ELANZ is for suckers?
Lou: Ow! No they’re not. The man I got them from said they were a great buy. A steal! You see, anytime before 5PM Eastern time on August 31, 2005, I get to trade EIGHT of my warrants for ONE share of Elan ADS! It’s a bargain!
Bud: (Another slap): No you dooferamous! You do not get to trade eight warrants for a share of Elan stock. You get to trade eight warrants for the RIGHT to BUY Elan stock for $26.72.
Lou: Huh? But the stock closed at $16.26 today. What good is the right to buy a share for $26.72 when I can buy a share for $16.26 in the market? That doesn’t make sense, Abbott.
Bud: Well, people buy it because they think Elan stock will rise ABOVE $26.72 between now and August 31, 2005.
Lou: Aha! So I DID make a great buy! You see, I think that Elan is going to hit $30 by August 31, 2005. So, I’ll be in the money! La la la! Let’s see, I spent $1,000 today, and bought 935 warrants at $1.07 each. That means, at eight warrants per Elan ADS, I control 117 shares of Elan ADS. So when the stock hits $30, I profit $384 dollars ($30 less $26.72 right-to-buy price = $3.28 x 117 shares = $384). Yeah baby!
Bud: Look here, gooberboy. Assuming the stock hits $30, you get $384 in proceeds when you cash ‘em in. But remember, you paid $1,000 to get the warrants in the first place. So you really lose $616! (slap).
Lou: Ow! Well, I was just kidding about the $30. In fact, I’m certain Elan is going to hit $40 by that time, so I’ll definitely make money! Let’s see, $40 less $26.72 exercise price less $8.56 ($1.07 x
in warrant costs….that’s a profit of $4.72 per share, or $552 big smackeroos!
Bud: Yes, but with the $1000 you spent on warrants today, you could have bought 61.5 shares of Elan at today’s closing price of $16.26/share. So if the stock does hit $40, your shares would be worth $2,460, or a profit of $1,460! Lou, isn’t $1,460 greater than $552? And remember, it’s much less risky to hold shares. If for some reason the stock closes at, say, $26 on August 31, 2005, your stock would still be worth $1,599, but your warrants would be absolutely WORTHLESS!
Lou: Eh, well, I was just funnin’ about the $40 also! In fact, I’ll bet my left buttcheek that Elan stock hits $60 by that date. If so, my profit will be $2,892 ($60-35.28= 24.72. $24.72 x 117 shares = $2,892). If I just held shares, the profit would only be $2,690 (61.5 shares x $60 = $3,690, less $1000 initial investment). So there!
Bud: Yes, but you could have bought January 06 / $25 call options for $3.80 a share today. Since they only sell options in 100 share lots, you could have bought 200 for $760. If the stock does hit $60 by August 31, 2005, your 200 options would be worth $7000, or a profit of $6,240. In other words….(slap).
Lou: Ow. I’m a baaaad boy. But why would that nice man tell me that these warrants were a great bargain?
Bud: Because that “nice man” most likely was looking for suckers like you to take his ELANZ shares off his hands at a nice tidy profit.
Lou: Mmmm, I’m sure that nice Mr. Ponzi wouldn’t do anything like that to me. Oh, and one more question, Abbott?
Bud: Yeah?
Lou: Why is that Mr. Huntsman so grumpy to us American mice-folk?
Bud: (Slap) Enough with the OFF-TOPIC banter!Comment
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Thanks King! I've always liked Abbott and Costello!Comment
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well allrighty then!
King wrote:
the warrants are for suckers...........
this is a little dated written last year but you will get the idea !!!
Once and for all, let iron out the great mysterious puzzle that is the ELANZ warrant.
With the less sophisticated investor in mind, the following will be demonstrated via the characters of Abbott and Costello in the form of cartoon mice:
________
Well I axed fer it i reckens, all dem big wurds n all. but I thank yu fer da edgycashun. Shudda worned you tho tu rite mo slow cuz my reedin ain't so fast.
hmmmmm. lemme see hear a minit ..I bots it at 24 centz yesturday n tuday theys worth .43. Butt I missed the hi and gots owt at 40 cenz. hmmmm... I aint got that meny fingurs n tows , King, but I thinx i made me sum money. <toothless grin> ah yep yep, I think ah did!
King, I recommended ELANZ to you as a trading vehicle, not an investment in future shares. You are one tough cookie!"Whatever you can do or dream you can , begin it. Boldness has genius,power and magic in it." GoetheComment
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elanz is a fraud ...
options are for trading they are up alot more than elanz
they are not worth 1 penny !!!!!!!!!!Comment
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hey abbott look
"DUBLIN, Ireland--(BUSINESS WIRE)--March 8, 2004--Responding to a number of recent inquiries from the investment community, Elan Corporation, plc today reiterated the terms of its Series Z warrants. As reported in Elan's Annual Report on Form 20-F for the fiscal year ended December 31, 2002, each Series Z warrant is exercisable into 0.127585 of an Elan American Depositary Share (ADS). Each ADS represents one Elan Ordinary Share, at an exercise price of $26.72 per ADS, subject to certain anti-dilution adjustments. The Series Z warrants expire at 5:00 p.m. Eastern Time on August 31, 2005."Comment
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Elan to Present at SG Cowen 25th Annual Healthcare Conference
DUBLIN, Ireland--(BUSINESS WIRE)--March 11, 2005--Elan Corporation, plc announces that it will present at the SG Cowen Annual Healthcare Conference in Boston, MA on Wednesday, March 16, at 10:30 a.m. Eastern Standard Time, 3:30 p.m. Greenwich Mean Time. Interested parties may access a live audio webcast of the presentation by visiting Elan's website at www.elan.com and clicking on the Investor Relations section, then on the event icon. An archived version of the webcast will be available at the same url following the presentationComment
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Sunday Times article from Ireland brings good news for Elan
Ireland: Elan board in battle over break-up plan
Paul Durman
GARO ARMEN, the former chairman of Elan Corporation, is pushing the group’s directors to split the operation into two separate public companies.
The move is seen as an attempt to distance the drug- delivery component of the business from the controversy surrounding Tysabri, the multiple sclerosis drug withdrawn from the market on February 28 following the death of a patient.
The proposal was made at a heated boardroom meeting which was exploring options for the company in the wake of the Tysabri upheaval. Elan currently has a market value of $2.3 billion (€1.8 billion).
Armen, a non-executive director, is seen as the key figure in the move to split the company’s original drug-delivery business from its American-based biotechnology operation.
It is not clear whether Kelly Martin, Elan’s chief executive, supports the plan. It is believed that executive management may want to maintain control of a much larger business.
Sources close to the company say the twin-track approach is part of a plan to buy the group more time while it conducts further analysis of the potential problems with Tysabri, which the company still hopes can be marketed separately.
Elan’s scientists remain confident they can demonstrate that Tysabri was not responsible for the death of one patient and the illness of another.
The company maintains the symptoms only became apparent when the medication was used in combination with Avonex, a successful multiple sclerosis drug produced by Biogen Idec, its joint-venture partner for Tysabri.
Elan is still loss-making and was relying on the expected success of Tysabri to return it to profitability by the end of next year. It had only recently stabilised its finances, having spent three years selling assets to pay off more than $2 billion of debts.
One source familiar with the directors’ discussion said that Armen is arguing for further radical action, since the group has few remaining assets to sell.
Elan began life more than 35 years ago as a drug-delivery specialist using formulation technologies to improve or extend the performance of existing medicines. This part of the business is still a substantial employer in Ireland, as well as in America.
The biologics arm is based in San Francisco. One suggestion is that it could assume the name of Athena Neuroscience, after a company Elan bought in 1996.
If the move proceeds, shareholders in Elan would be offered shares in the new company on a pro-rata basis to their existing holdings.
In a separate development, a New York law firm has filed a class action against Elan and its senior executives on behalf of disgruntled investors who allege the company knew about the dangers of Tysabri much sooner than it has admitted.Comment
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uh oh
boy am I glad I'm not holding this right now!
I might consider picking some up again though, if it keeps sinking like this.Comment
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You're brave Jeisen.Originally posted by jiesenComment
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Lost more today. Two thing I learned from this:
1) I should have protected my holdings by buying PUTs...
2) I should have waited for dust to settle before buying more call options when ELN was $7.50.
Let's see how things go from here...
Regards,Comment
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Well, the gap drop to 3.00 isn't exactly unexpected unfortunately. But if I'm not mistaken, King has protective puts, which should ease this pain.
I'm still holding Jan 06 2.50 strike puts (+WTBMZ) as posted here http://www.mrmarketishuge.com/forum/...&postcount=313
which are now trading 0.85x0.90. That's a three bagger or 3x my investment. Lord I hope King did something like this. I'm holding these in anticipation of continued weakness.Comment
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Oh boy - you bought calls?! ~spank with a big stick~ Sorry to hear it stocks54. It's never good to hear a forum member getting hammered.Originally posted by stocks54
Read the chart. Charts don't lie. Trade what you see, not what you feel.
The fact that you've learned a lesson is great. This lesson will stick with you, especially if it one where you are feeling pain. I have made similar mistakes in the past, which is why I'm such a loud-mouth about being disciplined. I had the best teacher of all; painful experience. So chin up; move on; and don't make the same mistakes again! There is always light at the end of the tunnel; no matter how dark it seems.Comment
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