(Total Views: 472)
Posted On: 06/08/2025 10:52:28 AM
Post# of 154604
I agree, actually, and there's no way we can ignore that disastrous Fife/Paulson financing that NP engaged in, it's a toxic brew for sure. And many if not most of those Paulson investors could care less about the company. While to us longs it may seem illogical to sell warrant-generated stock at some relatively low price, they just signed on to get their percentage on investment and thus have a totally different frame of reference from us. I'm with those who can't wait for those warrants to be cleared, they are definitely a drag on the stock.
But I can't get there with the idea that when warrants are exercised and the shares then sold that that represents a short sale. Short sales occur when a trader borrows the stock and then sells it, with a plan to "cover" by buying shares at a lower price and pocketing the difference. When warrants are exercised as in the Paulson case the warrant holder then has the shares in hand, so to speak and can sell them for a profit when the share price rises above the warrant exercise price. Not a short sale.
I've checked this in the past with Chatgpt, but here it is again:
"What Happens When Warrants Are Exercised
The holder pays the exercise price to the company.
The company issues new shares to the warrant holder.
The warrant holder now owns newly created, fully paid shares.
They can then sell those shares on the open market like any other common stockholder.
This is a long position — not a short one — because the seller is disposing of shares they own, not borrowing.
❗️Short Sale Defined
A short sale occurs when:
A trader borrows shares they don’t own,
Sells them into the market,
And aims to buy them back later at a lower price.
That’s fundamentally different from exercising a warrant, which involves the purchase and issuance of new shares, not borrowing and selling someone else's.
???? Why the Confusion Happens
Sometimes warrant holders sell shares quickly after exercising, causing downward pressure — this can look like short selling.
But technically and legally, it’s a sale of a newly acquired long position, not a short."
But I can't get there with the idea that when warrants are exercised and the shares then sold that that represents a short sale. Short sales occur when a trader borrows the stock and then sells it, with a plan to "cover" by buying shares at a lower price and pocketing the difference. When warrants are exercised as in the Paulson case the warrant holder then has the shares in hand, so to speak and can sell them for a profit when the share price rises above the warrant exercise price. Not a short sale.
I've checked this in the past with Chatgpt, but here it is again:
"What Happens When Warrants Are Exercised
The holder pays the exercise price to the company.
The company issues new shares to the warrant holder.
The warrant holder now owns newly created, fully paid shares.
They can then sell those shares on the open market like any other common stockholder.
This is a long position — not a short one — because the seller is disposing of shares they own, not borrowing.
❗️Short Sale Defined
A short sale occurs when:
A trader borrows shares they don’t own,
Sells them into the market,
And aims to buy them back later at a lower price.
That’s fundamentally different from exercising a warrant, which involves the purchase and issuance of new shares, not borrowing and selling someone else's.
???? Why the Confusion Happens
Sometimes warrant holders sell shares quickly after exercising, causing downward pressure — this can look like short selling.
But technically and legally, it’s a sale of a newly acquired long position, not a short."
(7)
(0)
