Fortuno You do repeat yourself endlessly about wa
Post# of 153771
(Total Views: 626)
Posted On: 06/03/2020 8:23:03 PM
Fortuno
You do repeat yourself endlessly about warrant holders selling causing the price problems without providing any proof.
I contend that you are still wrong because in a taxable account, the tax but is large if you sell right after exercise.
Not sure if you understand the difference between exercising and owning shares and actually selling those shares.
Lets give you the control for all warrants in taxable accounts for a day.
Here is the affect of your decision to you exercise and sell right away rather than holding for a year
Let’s assume today you did that with 1 million shares - that would cost you about $7000,000 ( I am assuming an avg warrant price of 70 cents) since you sold right away your total taxable gain would be 2.2 million (2.9million proceeds less cost basis of 700k for a 2.2 million gain)
Because of your poor advice the seller would pay short term capital gains tax of 37% times 2.2 million or $814,000
On the other hand if the person exercised their warrants and held them for a year and sold at the same 2.90 price and were taxed at long term gains rate of 20% times 2.2million or 440k. This would be $374,000 less in taxes by not following your foolhardy advice.
While I am sure there are some people who might do this if they had no other shares and needed some funds or if they had warrants in an IRA, I would ask you to consider this extra 17% tax or $340,000 in extra taxes before you keep contending that the problems are with warrant holders exercising AND selling shares before holding a year.
Please find a more plausible reason for selling that this constant unsubstantiated selling by warrant holder.
IMO
You do repeat yourself endlessly about warrant holders selling causing the price problems without providing any proof.
I contend that you are still wrong because in a taxable account, the tax but is large if you sell right after exercise.
Not sure if you understand the difference between exercising and owning shares and actually selling those shares.
Lets give you the control for all warrants in taxable accounts for a day.
Here is the affect of your decision to you exercise and sell right away rather than holding for a year
Let’s assume today you did that with 1 million shares - that would cost you about $7000,000 ( I am assuming an avg warrant price of 70 cents) since you sold right away your total taxable gain would be 2.2 million (2.9million proceeds less cost basis of 700k for a 2.2 million gain)
Because of your poor advice the seller would pay short term capital gains tax of 37% times 2.2 million or $814,000
On the other hand if the person exercised their warrants and held them for a year and sold at the same 2.90 price and were taxed at long term gains rate of 20% times 2.2million or 440k. This would be $374,000 less in taxes by not following your foolhardy advice.
While I am sure there are some people who might do this if they had no other shares and needed some funds or if they had warrants in an IRA, I would ask you to consider this extra 17% tax or $340,000 in extra taxes before you keep contending that the problems are with warrant holders exercising AND selling shares before holding a year.
Please find a more plausible reason for selling that this constant unsubstantiated selling by warrant holder.
IMO
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