# Cequence Energy (CQE.TO)



## freshjiive (Jul 26, 2011)

Hi there
recently made a purchase of some of this company. Came across this today http://www.newswire.ca/en/story/931773/cequence-energy-announces-anticipated-exercise-of-warrants
can someone explain what it means?


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## PMREdmonton (Apr 6, 2009)

I haven't dealt with warrants before but I think this is the gist of them:

Warrants are usually an option to buy shares at a certain price sometime down the line. They are sold to provide some immediate financing at a time of need.

Warrants are usually a dilutive offering of common shares so pre-existing shareholders are diluted when the warrants convert to common shares.


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## humble_pie (Jun 7, 2009)

hmmmnn. This is one of those guessing games.

there is only one warrantholder. For his or its sake, the date of the warrant exercise as well as its exercise pricing period have been advanced by 3 months. Are, in fact, occurring now, "even as we speak," as the pundits like to say.

it's an unusual development. Obviously the warrantholder, who is said to not be an insider, desired it. In what way could the warrantholder benefit from the new arrangement ...

to what extent does the company need the $$ now, so its direction has chosen to force the warrant exercise prematurely ...


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## humble_pie (Jun 7, 2009)

postscript, warrants are often included in flow-through share issues, which this one was, as a bonus or kicker. A standard arrangement would be a unit offering consisting of one share plus one-half warrant.

per se warrants do not raise any extra $$ at the time of issue of the share units.

later, when warrants are exercised, the company issues the new shares from treasury & that is when it collects the extra $$.

in the case of cequence the exercise date was advanced from june to this month, march, suggesting that the co needs the cash now.


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## freshjiive (Jul 26, 2011)

thnx for the info!


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