|JPMorg EM Sub
||SUB SHS 1P
||EPS - Basic
||Market Cap (m)
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|p1966: Thankyou to everyone for your comments.
I have just had a look at JIIS for January 2010 and, I do see, that was quite a wobble. Of course, that was with a 20p increase in the exercise price, where the underlying subsription share price was approx 150p.
With JMGS subscription shares, the uplift will be 40p, on a subshare price that is around 100p. So, potentially a much greater impact - be interesting to see what happens.
Looking ahead, I suppose the subshare 543p exercise price for 2014 would require a 20% uplift in the current JMG ordinary share price to maintain the current value of around 100p in the subshares. We have had a great bounce this year, which I don't imagine could be repeated. But 20% over 4 years shouldn't be too stretching, and maybe we could hope for a little more.
|p1966: Any views?
The sub shares (JMGS) closed today at (mid price) 93p. Add the July 2010 excercise price of 422 pence, and you get 515p. This contrasts to a share price (JMG) (mid price) of 518.5p.
I would normally expect a warrant / sub share to trade at a premium, on the basis that you have got the gearing and a life of a couple of years (albeit with stepped exercise prices in the case of sub shares).
However, if I have understood correctly, the sub shares are currently trading at a discount? This has been the case for at least a week or so.
If I had £1m in my pocket, I would suggest this was an opportunity for arbitrage - buying the subs, exercising, and then selling the shares - and pocketing the (small - hence the need for £1m) difference. Only problems 1) I don't have £1m, and 2) the normal market size of the subs is very, very small, and I don't think there is a lot of liquidity - despite the fairly hefty market cap. of the ordinary shares.
Long story short - I currently plan to be in the subs for the longer term (so am not trying to ramp), but surely this suggests they are underpriced?|
|andrbea: an old post, as background:
You'll see that the 2010 exercise price for JMGS is indeed just 422p - so the shares are in the money already. And with the share price at 470p when I last looked and the sub share just 56p then the warrant is trading with very little (just 8p) extra to pay for time value. So YES this sub share is astonishingly cheap, but so are several others including ADDS,UEMW and UEMX. JIIS, NIIW and JAIS. Others in the posts above and a few more not in those posts are also technically very cheap.
The key question is whether markets are now at a peak for many months. If so the fact that these warrants and sub shares are stonkingly cheap is not much good if the share prices all go down, though their cheapness might limit the warrant price falls if that happens.
What you CAN be absolutely certain of is that if the shares listed in the posts above can keep rising then the warrants are going to go up fast and much faster than the shares.
Best for upside imo of the IT warrants/sub shares is JMGS because of the 8 times gearing. So I haven't made that up - another 10% on the JMG share price should see the sub share double. IF JMG shares disappoint between now and the 422p exercise price July 2010 date, then there are further exercise dates at 460p until July 2012, and this one too is just about in the money already, and then a final one at 543p up to July 2014|
JPMorg EM Sub share price data is direct from the London Stock Exchange