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Question

What is an Exercise of Warrants?

Answer

Warrants give the holder the entitlement to purchase Ordinary shares in a specific company at a set price, at a future date, by exercising their Warrants.

There is no obligation for holders to exercise. Warrantholders wishing to exercise, will pay the exercise price to receive new Ordinary share(s) for every Warrant held.

As a holder of Warrants, you would hope that the price of the Ordinary share rises above the exercise price so that they can buy the Ordinary shares for less than the market price.

Warrants are usually exercisable for a number of years, and many are also tradable, meaning they can be bought and sold in the open market.

 

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