@smallville- your welcome brother. yes bro. the good thing about the warrant 16 is when the semb family picks up this share will give the highest returns due to the pricing nature. lowest price share in the entire market. at 40 cents 10 cents increments means 25% and at 30 cents , 10 cents increment means 33%. here is the top 20 shareholders list.
SMB LEASING PLC
Top Twenty Major Shareholders - Non Voting Warrants
1 Seylan Bank Plc -A/C No. 03 36,326,166
2Mr. R Gautam 17,297,080
3Mr. R Ganeshan 11,300,000
4Mr. SBM Padmasiri 10,000,000
5 Waldock Macknzie Ltd/ Mr. SA Gulamhusein 7,000,000
6Mr. TGW Mudiyanse 5,873,800
7Mr. EMP Ambanpola 5,500,000
8Mr. LD Wicramasinghe 5,000,000
9Mrs. HN Padmsiri 5,000,000
10Miss. NWABSMM Dayarathna 5,000,000
11 The Bishop of Galle 4,600,000
12Mr. RSP Hewage 4,383,700
13Mr. JJ Ravindra 4,141,000
14Mrs. HMT Uththara 4,005,700
15 Dr. RDK Arachchi 4,000,000
16 Extreme Innovations (Pvt) Ltd 4,000,000
17Mr. K Rajakanthan 3,600,000
18 Dr. D Rajakanthan 3,500,000
19Mr. SE Dias 3,145,300
20Mr. MLA Benedict 3,026,800
The interesting fact if you analyze the semb family would be that all other 3 shares Doctor has substantial amount of shares but has none with respect to the warrant 16. Just because doctor bought shares it doesn't mean that its good. just an observation. but if you analyze the shareholders even these people are not crazy idiots. mr.gautam and seylan bank of course would be knowing that by December they need to convert. 99% of these big shots were their with the company even before the warrants were issued and to most of them the costs for the warrants is zero. so if they really want they can dispose their entire stake even at 40 cents/30 cents/20 cents or at minimum 10 cents they will have a massive profit. I mean just imagine seylan bank selling their entire warrant 16 at 10 cents(the lowest possible rate- which will not happen because their will be lot of buyers at higher prices). shall we calculate their profits.
36,326,166*10 cents=3,632,617 rupees. and a saving of
36,326,166*80 cents=29,089,328 rupees as the opportunity cost. if they keep without selling they would incur additional 29 million rupees and get 36 million shares of non voting shares and as at today will incur a unrealized profit of 3.6 million.((.8-.9=.1)*36=3.6). so if they do not sell net outflow is 29-3.6= 25.4 million.if they sell the net inflow is at present rate 36*.4+opportunity from the cash inflow = 9 million+opportunity of saving 29 million.
I just had only a one view of the scenario and all of your ideas are welcome to a more intellectual discussion. also we assumed that in seylan bank case it incur a unrealized loss on 3.6 million because they got the warrant s for free. imagine a guy buying the warrant for 40 cents. if you do the same calculation rather than it been a 10 cents unrealized gain it would be a (.4+.8-.9=.3) 30 cents unrealized loss from each share. so specific adjustment should be made according to different position.
I may be wrong and i am willing to learn from any one because the more we know the better our chances of winning.
so buying this at 30 and selling for 40 cents is a traders choice and i do not see any wrong in that. but the problem is i see every day people buy even at 50 cents and i do not understand. i think have lot more to learn in this market.
@market research- hehe nice one...very true...i told what i feel brother.. i hope you got it.
@sawdanjema- yes x will increase definitely till the conversion takes place since the price gap is crazy. but as soon as the conversion takes place this will go down and will stabilize slightly bit higher to the present state. due to the large number of shares i highly doubt whether it will stabilize at 1.3. all the very best
Last edited by cse.profit on Mon Sep 26, 2011 6:16 pm; edited 1 time in total