A stock warrant is a security that entitles the holder to buy the underlying stock of the issuing company at a fixed exercise price until the expiry date. Often a stock warrant is issued as a bonus of an equity financing however sometimes a stock warrant is issued as a security by itself.
Example: you read a press release that a resource company is to raise $20mln by issuing 40,000,000 shares at $0.50 a share. The participants in the equity offering will receive an extra stock warrant per share they buy as a ‘sweetener’ which can be exercised until two years after the closing of the equity financing at an exercise price of $0.75 per share.
As an investor you should always study the accompanying notes to the share capital, mentioned on the balance sheet. In these notes you will see if the company has stock warrants outstanding, including their exercise prices and expiry dates.
If you would like to know why I think it’s very important to know if a company has outstanding stock warrants, I refer you to the note at the bottom of this page.
Canadian stock warrants which are called to trade are listed on the Canadian stock exchange(s) and thus can be bought as an investment by the general public. The warrants are listed as the company’s stock symbol followed by “.WT”. If Canadian companies have more than one stock warrant listed then their warrants are listed as: company’s stock symbol + “WT.A”, “WT.B”, etc.
Where to Find a List of Outstanding Canadian Stock Warrants
If you are interested in investing in Canadian stock warrants I recommend you to visit www.financialpost.com. This website of the Financial Post provides all the information you need for investing in stock warrants on the Canadian stock exchange(s). To find this information, select Markets in the top menu, followed by Market Data. Under the header FP DataGroup Tables you select: Warrants (Monthly) to see the list of outstanding stock warrants as shown in the picture below.
Note: Remember that if your entry price in a stock is higher than the outstanding exercise prices of the stock warrants, your shares will be diluted as soon as these warrants are exercised!
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