Posted by Genius Y > 2012-08-23 12:55 | Report Abuse

http://www.bursamalaysia.com/market/listed-companies/structured-warrants/922748 Issuer : AmBank Listing Date : 4 April 2012 Expiry : 28/2/2013 Conversion ratio : 2 JCY HA to 1 JCY Last done Price : 0.06 Exercise Price : 1.22 1. Background : JCY is an outdated industry which mainly manufactures HDD hard drive. It is listed by the means of " offer of sales", means major shareholders selling shares and keep all the proceeds. This indicates owner himself is doubtful about the future in this company. It proves correct after the IPO where co falls into the red ink. As for offer for sale of stock, the shares that investors subscribe to are from existing company owners. Therefore, the money raised from the new investors will be channelled to existing owners, which also means the existing owners will have cashed out a portion of their investments in those companies. Even though this does not imply that Company A is not able to perform in future, investors need to understand that the remaining 75% of the shares or 1,534 million (0.75 x 2,045 million shares) owned by the existing owners are in effect “free” to them. If Company A is fundamentally strong with good future prospects, then investors should not be too worried about the existing owners cashing out. However, if the fundamentals of Company A start to deteriorate, investors need to be extra careful as the remaining 75% of the shares owned by the existing owners are now costless to them. Under such circumstances, every share the existing owners manage to sell into the market, regardless of the price, is extra gain for the owners. http://biz.thestar.com.my/news/story.asp?file=/2010/5/5/business/6190058&sec=business 2. Rebound : Thailand flood is a lucky factor for JCY where HDD hard drive is under supply and push up the price at that exceptional period of time. 3. Before exercise date, we still have 2 earnings announcement to await which can further push down the price of JCY. December for Q4 2012 Feb for Q1 2013 4. Buy buying 2 warrants @ 6 cents now ( cost is 12 cents. We are in the money when JCY drops below 1.10 ( 1.22 minus cost of 12 cents). 5. In theory, JCY HA should cost :- 0.10, when JCY is 1.00 0.20, when JCY is 0.90 0.30, when JCY is 0.80 6. Please bear in mind that below Thailand flood, JCY is traded between 0.40 to 0.70 for the period of Feb - Nov 11. 7. Our maximum loss is limited, while maximum gain is unlimited, if JCY falls back to the original level.