Warrant

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Warrant

A security entitling the holder to buy a proportionate amount of stock at some specified future date at a specified price, usually one higher than current market price. Warrants are traded as securities whose price reflects the value of the underlying stock. Corporations often bundle warrants with another class of security to enhance the marketability of the other class. Warrants are like call options, but with much longer time spans-sometimes years. And, warrants are offered by corporations, while exchange-traded call options are not issued by firms.

Warrant

A certificate, usually issued with a preferred stock, giving the holder the option of buying an underlying asset, in this case usually more stock, at a certain strike price. The strike price is usually higher than the market value of the underlying asset at the time of issue but lower than the expected market value at some point in the future. Some warrants expire a few years after issuance, but perpetual warrants can theoretically last forever. Unlike options, stock warrants are issued by companies during a round of financing, rather than by an individual investor or brokerage. Companies issue stock warrants to attract investors who might not otherwise be interested.

warrant

A security that permits its owner to purchase a specific number of shares of stock at a predetermined price. For example, a warrant may give an investor the right to purchase 5 shares of XYZ common stock at a price of $25 per share until October 1, 2007. Warrants usually originate as part of a new bond issue, but they trade separately after issuance. Warrants usually have limited lives. Their values are considerably more volatile than the values of the underlying stock. Thus, investment in warrants is not for the timid. Also called equity warrant, stock warrant, subscription warrant. See also debt warrant, perpetual warrant, usable bond.

Warrant.

Corporations may issue warrants that allow you to buy a company's stock at a fixed price during a specific period of time, often 10 or 15 years, though sometimes there is no expiration date.

Warrants are generally issued as an incentive to investors to accept bonds or preferred stocks that will be paying a lower rate of interest or dividends than would otherwise be paid.

How attractive the warrants are -- and so how effective they are as an incentive to purchase -- generally depends on the growth potential of the issuing company. The brighter the outlook, the more attractive the warrant becomes.

When a warrant is issued, the exercise price is above the current market price. For example, a warrant on a stock currently trading at $15 a share might guarantee you the right to buy the stock at $30 a share within the next 10 years. If the price goes above $30, you can exercise, or use, your warrant to purchase the stock, and either hold it in your portfolio or resell at a profit. If the price of the stock falls over the life of the warrant, however, the warrant becomes worthless.

Warrants are listed with a "wt" following the stock symbol and traded independently of the underlying stock. If you own warrants to purchase a stock at $30 a share that is currently trading for $40 a share, your warrants are theoretically be worth a minimum of $10 a share, or their intrinsic value.

warrant

a FINANCIAL SECURITY issued by a company to raise capital, which gives the holder the right to purchase SHARES in the company at some specified future date at a set price. Warrants are quoted on the STOCK MARKET and thus can be bought and sold in the same way as the issuing company's shares, usually at a much lower price. In essence a warrant is similar to convertible LOAN STOCK (but without interest payments) which can be converted into equity at the appointed time. The holder of a warrant forgoes current income in the hope of making a sizable capital gain on conversion.

Warrant

A certificate authorizing the holder to buy a corporation's stock at a specified price, either indefinitely or within a certain time. Warrants are different from rights in that they generally last longer, and the price at which the holder is entitled to buy the stock usually is more than the stock's market price when the warrant was issued.
References in periodicals archive ?
Rule 41(b)(4) Authority to Issue the Warrant: A magistrate judge in the district where the device will be installed may issue a warrant to install a tracking device.
A dilemma exists when warrants are issued to shareholders who are also service providers.
When warrants or options are part of a loan package, part of the proceeds is allocated to the warrants, creating OID, which is amortizable over the life of the loan.
Supreme Court has held that warrants must be voided where a false statement, knowingly or with reckless disregard for the truth, was included in support of the application for a warrant and where, but for that statement, the warrant would not have been issued.
Priority is the name of the game when it comes to serving arrest warrants in Los Angeles County, according to law enforcement officials.
Nasdaq: HISS) announced today that it has extended the period of time during which the exercise price of its Redeemable Common Stock Purchase Warrants ("Initial Warrants") would be reduced from $7.
PST) on December 25, 2006, will be issued callable warrants entitling each warrant holder the right, but not the obligation, to convert into a series of preference drilling participation shares of PDEI, as follows:
With a force of just over 400 full-time law enforcement officers, the department found itself plagued with thousands of outstanding warrants.
In TAM 200334001, the IRS National Office determined that a controlled corporation's sale of warrants to its parent's (Taxpayers) affiliate, in connection with Taxpayer's spinoff of the controlled corporation, was not a bargain sale, because the sale was at ann's length.
This announcement shall not constitute an offer by the Company to accept the exercise, or the solicitation of the exercise, of the warrants nor shall there be any acceptance of the exercise of warrants or the issuance of the common stock underlying the warrants in any state in which such offer, solicitation, acceptance or issuance would be unlawful under the securities laws of such state.
The fourth closing will occur within five business days after the date that an initial resale registration statement for the shares underlying the notes and warrants issued in the private placement is declared effective by the SEC.
One idea was to issue customers warrants to motivate them to purchase a certain amount of product.