Hi Adamcz,
Why?
Well now MTR have protected their investment in MOD.
Imagine if a serious offer is made and MOD goes into a trading halt...
Maybe one so compelling that MOD would agree to the sale...
In that case MTR would not have benefited from the non-exercised warrants.
So it's a good good defensive strategy and asset protection, especially if they believe a potential buyer is keen and is likely to make an offer.
It shows MTR is extremely confident... so confident they are happy to lock up their cash in the asset.
(It also possibly indicates a potential buyer is near too).
My guess is that other warrant holders will be feeling nervous about now and as soon as MOD are trading again they will look to exercise.
At the very least they will be reviewing the option.
Most warrant holders will be in the money and some may sell existing shares to convert.
Flip the warrants if you will.
You have to judge for yourself but I think this makes an interesting opportunity for traders as well as long term investors. For this reason I can see a very large trading volume once the trading halt is lifted.
If the news good the volume should propel the MOD sp north very quickly indeed.
This is all imho of course - I am a investor/LTH and not a day trader.
atb
JS
MOD Price at posting:
3.9¢ Sentiment: None Disclosure: Held
