stock-purchase warrant
Noun: A stock-purchase warrant is a financial instrument, a type of security, issued by a company. It provides the holder with the right, but not the obligation, to buy a specific number of the company's common shares at a predetermined price (the exercise price) within a certain time period or on a specific date. Warrants are often attached to other securities, like bonds or preferred stock, when they are issued to make the offering more attractive to investors.
A stock-purchase warrant is a tradable certificate or electronic record. It is distinct from the stock itself and has its own market value. The primary use is to give an investor a future opportunity to buy shares at a fixed price, which could be profitable if the market price of the stock rises above that fixed price.
- The company issued bonds with stock-purchase warrants attached to lower its overall interest costs.
- She exercised her stock-purchase warrants when the company's share price soared, allowing her to buy stock at a significant discount.
- Trading volume for the stock-purchase warrants increased as investors speculated on the company's future growth.
- Detachable Warrant: A stock-purchase warrant that can be separated from the bond or preferred stock it was issued with and traded independently.
- Warrant Coverage: This refers to the number of warrants issued relative to the number of shares in a financing deal. For example, a deal might have 50% warrant coverage, meaning warrants are issued to buy half as many shares as are being sold in the offering.
- Warrant (Noun): The more general, shortened form for a stock-purchase warrant.
- Call Option (Noun): A similar derivative contract that gives the right to buy an asset at a set price, but options are typically issued by exchanges and have shorter terms, while warrants are issued by the company itself.
- Right (Noun): A short-term instrument issued to existing shareholders to buy new shares, similar to a warrant but usually with a much shorter lifespan and offered at a greater discount.
- Equity Warrant
- Subscription Warrant
- To exercise a warrant: The act of using the warrant to purchase the underlying common stock.
- Warrant expiration date: The final date by which the warrant must be exercised.
- Out-of-the-money warrant: A warrant whose exercise price is above the current market price of the stock, making it not immediately profitable to exercise.
- a type of security issued by a corporation (usually together with a bond or preferred stock) that gives the holder the right to purchase a certain amount of common stock at a stated price
- as a sweetener they offered warrants along with the fixed-income securities