JP Morgan TARP Warrants to be Auctioned Tomorrow
Treasury isn't giving much lead time for this. The press release was yesterday, the modified Dutch auction is tomorrow. Here's the preliminary prospectus if anyone wants all the gory details.
88.4 million warrants with a strike price of $42.42
Warrants expire Oct 28, 2018
Minimum bid price $8, bids must be in 25 cent increments above the minimum
Minimum bid lot size 100 warrants
Auction starts a 8:00 am Thurs, 10 Dec and ends 630 pm Thurs.
Deutsche Bank Securities is the auction agent
The warrants are similar to call options. The warrant holder has the right, but not an obligation, to purchase one share of common stock at the strike price any time up to expiration. Like a call, if JPM stock price is below the strike price at expiration, the warrants would expire worthless. The warrants are scheduled to be listed on the NYSE after the auction.
This will be the second auction of TARP warrants. Here's a rundown of the first auction. Time will tell if TMF is being Foolish or foolish for letting me try freelance writing :)
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