Author Topic: BAC-WT - Bank of America Warrants  (Read 2058951 times)

onyx1

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Re: BAC-WT - Bank of America Warrants
« Reply #7340 on: October 16, 2018, 02:42:34 PM »
Am i understanding this correctly... if the stock price does not go over $30.79 by Oct 24 then the 121 million warrants will expire worthless? Given the warrants were trading at $29.46 on Sept 28 (quarter end), which is below the strike price of $30.79, they will not be included in BAC diluted share count? This will be a silver lining for existing shareholders with the recent priceweakness we have seen.

CHARLOTTE, N.C.--(BUSINESS WIRE)--Oct. 16, 2018-- Bank of America Corporation today reminded holders of warrants issued October 28, 2008 to purchase shares of the Company’s common stock (CUSIP No. 060505 15 3) (the “Warrants”), that the Warrants will expire on Monday, October 29, 2018.

The Warrants were originally issued to the United States Department of the Treasury on October 28, 2008, and were offered to the public on March 9, 2010. The Warrants trade on the New York Stock Exchange (“NYSE”) under the symbol BAC WS B. The NYSE has notified the Company that it will suspend trading in the Warrants after the close of trading on October 24, 2018 so that trades can be settled by October 29, 2018.

As of September 30, 2018, there were 121,584,090 Warrants outstanding. Each Warrant represents the right to purchase one share of the Company’s common stock at an exercise price of $30.79 per share.

A holder of Warrants can obtain further information on exercising the Warrants by contacting their broker. Brokers are encouraged to contact Computershare, the Company’s warrant agent, or The Depository Trust & Clearing Corporation in advance of the expiration date to confirm procedures for exercising Warrants and payment of the exercise price.

Any Warrants not exercised prior to the expiration time on October 29, 2018 will expire and be canceled, and the holder will not receive any shares of the Company’s common stock for its unexercised Warrants.

Good point.  In my opinion, BAC selling shares at $30.79 is value destructive so I hope for expiration.  BAC's repurchase history would suggest the same as they bought shares in March of 2018 at an average of $32.18.


StubbleJumper

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Re: BAC-WT - Bank of America Warrants
« Reply #7341 on: October 16, 2018, 03:51:46 PM »
Am i understanding this correctly... if the stock price does not go over $30.79 by Oct 24 then the 121 million warrants will expire worthless? Given the warrants were trading at $29.46 on Sept 28 (quarter end), which is below the strike price of $30.79, they will not be included in BAC diluted share count? This will be a silver lining for existing shareholders with the recent priceweakness we have seen.

CHARLOTTE, N.C.--(BUSINESS WIRE)--Oct. 16, 2018-- Bank of America Corporation today reminded holders of warrants issued October 28, 2008 to purchase shares of the Company’s common stock (CUSIP No. 060505 15 3) (the “Warrants”), that the Warrants will expire on Monday, October 29, 2018.

The Warrants were originally issued to the United States Department of the Treasury on October 28, 2008, and were offered to the public on March 9, 2010. The Warrants trade on the New York Stock Exchange (“NYSE”) under the symbol BAC WS B. The NYSE has notified the Company that it will suspend trading in the Warrants after the close of trading on October 24, 2018 so that trades can be settled by October 29, 2018.

As of September 30, 2018, there were 121,584,090 Warrants outstanding. Each Warrant represents the right to purchase one share of the Company’s common stock at an exercise price of $30.79 per share.

A holder of Warrants can obtain further information on exercising the Warrants by contacting their broker. Brokers are encouraged to contact Computershare, the Company’s warrant agent, or The Depository Trust & Clearing Corporation in advance of the expiration date to confirm procedures for exercising Warrants and payment of the exercise price.

Any Warrants not exercised prior to the expiration time on October 29, 2018 will expire and be canceled, and the holder will not receive any shares of the Company’s common stock for its unexercised Warrants.

Good point.  In my opinion, BAC selling shares at $30.79 is value destructive so I hope for expiration.  BAC's repurchase history would suggest the same as they bought shares in March of 2018 at an average of $32.18.



 
Sure, the B warrants are probably value destructive if they are exercised, but it's not too material.  What would be "fair value"?  Would it be $34?  $35?  So, if the B holders exercise their warrants, they'd effectively expropriate how much of existing shareholder wealth?  121 m warrants X ($35-$30.79)= ~$500m.  With 10 billion common shares outstanding, they'd effectively expropriate what, 5 cents per share of value from existing shareholders?

It's better that they not get 5 cents of our value, but it's not really the end of the world if they do.


SJ

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Re: BAC-WT - Bank of America Warrants
« Reply #7342 on: October 16, 2018, 04:38:36 PM »
Agreed that 111 million shares are not a needle mover. However. It is like getting 2 more months of share buybacks which I will gladly take :-)

Dynamic

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Re: BAC-WT - Bank of America Warrants
« Reply #7343 on: October 17, 2018, 12:16:15 AM »
The warrant conversion price question is interesting. I've read people more knowledgeable than me who say that major option expiry dates often coincide with slightly unusual trading patterns, prices and volume if the price is close to the strike price of a popular contract. I wonder if the warrants' imminent expiry will cause any noticeable effect on the stock price.