A question about your Sandstorm warrants

By flyfisher, December 11, 2011

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

Travis, Do you live in the U.S. or Canada (since U.S. citizens can’t trade the warrants for stock)? Do you know if Sandstorm plans to register the warrants in the U.S.?

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4 Comments on " A question about your Sandstorm warrants"

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Travis Johnson, Stock Gumshoe
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December 11, 2011 5:22 pm

I live in the US and have no need to exercise warrants (or options, for that matter). It’s almost always cheaper and easier to just sell the warrant/option back — then if you want to invest in the common stock with your proceeds, go right ahead.

Eric A.
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Eric A.
January 17, 2012 2:28 pm
I’ve been looking at the Sandstorm warrants for 2014, and I was wondering about liquidity risk. Perhaps I’m missing something, as I’m a bit of a newbie with regard to warrants, but what happens if you try to sell the warrant and no one wants to buy? I noticed that you said “sell the warrant/option back” – does that mean that the company will buy it back? I’m just imagining a scenario where you have wonderful paper profits but can’t sell the warrants due to a lack of liquidity. In a related question, why would someone does buy the warrants,… Read more »
Travis Johnson, Stock Gumshoe
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January 17, 2012 2:46 pm
No guarantees, and both the stock and the warrants are quite thinly traded — generally you’d expect an institutional trader would step in and buy the warrants if they slipped too far into the money, if only just to exercise them and pocket the discount for an easy trading profit. And no, I didn’t mean that the company would buy them back, I suppose it’s possible but it seems unlikely. You also have to be a Canadian investor to exercise the warrants, I believe, so if you’re not able to exercise them you are at least a little bit hostage… Read more »
Eric A.
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Eric A.
January 17, 2012 4:03 pm
Thanks very much for your quick reply! I just wanted to run a scenario by you to see if I’m understanding you correctly… If I wanted to buy the 04/23/2014 warrants (with an exercise price of 60 cents) at their current price of .7136, the stock price would have to go higher than 1.31 (plus whatever spread might exist) for me to make any money. Currently Sandstorm stock stands at around 1.25. I guess my questions would be the following: is there any historical data on the bid/ask spread for Sandstorm warrants? If so, what would it be? Does it… Read more »
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