Virgin Galactic and Barron’s, Come On Man
I’m not a ranter…is that a thing? There are a LOT of ways to make money both in the stock market and away from it, besides having a J O B. I’m more of a live and let live guy.
If you can teach people to make money trading weather patterns, or cannabis stocks, or gold, or doing Amazon retail arbitrage, more power to you. That’s awesome!
I have a very healthy respect for anyone sharing valuable info, and helping people make money. That’s because you can do SO MUCH with money. You can help yourself and others in so many ways. And, I believe if you’re a good person without money, you’ll be a good person with it.
Money itself is not evil in my very humble opinion.
Haven’t even started ranting yet, LOL.
But, when I see someone, especially a well respected publication that a lot of people read for financial advice, just get it 100% wrong, well, that bothers me.
This weekend an article ran in Barron’s about Virgin Galactic (SPCE) and the warrants. Hey, Barron’s just figured out Virgin Galactic has warrants and they have been up 1,000%…welcome to the party guys, LOL.
But, this language in the article REALLY burns my warrant trading behind.
“Take Tuesday’s warrant pricing. Investors could buy a warrant for $18.55. If exercised for $11.50, they would own one share of Virgin Galactic (SPCE), paying a total of $30.05 for it — that’s the $11.50 paid to Virgin Galactic (SPCE) and $18.55 paid to the former holder of the warrant. The stock closed Tuesday at $32.17. If investors sold the stock then, that’s $ 2.12 in profit.
Someone at Barron’s who has no idea how warrants work
It isn’t always that easy to execute an arbitrage trade.”
Really Barron’s, I mean REALLY?
If it were “THAT EASY” to do arbitrage we would ALL be filthy stinking rich and wouldn’t care if he DOW fell several thousand points in a day. No one would care…because this stuff is “THAT EASY.”
What the article failed to detail is that the warrants are NOT currently exercisable, and therefore you CANNOT buy a warrant trading at a discount to the common, exercise it, and pocket your $2.12. Good Lord guys. The reason it IS at a discount is exactly BECAUSE you can’t exercise it (yet).
You can read the whole article here if you’re a Barron’s subscriber, or probably on your brokerage site.
Now, warrant trading and arbitrage isn’t super hard stuff. I’m no brainiac…although one of my teachers once wrote my name on my report card as “Steven Brain Adams” as opposed to Steven Bryan Adams. So…maybe I am.
But, let’s not try to make it harder than it is by spreading completely wrong information which is “THAT EASY.” Wonder how much money the guy/gal writing and editing this article made on that arbitrage play???
Stay safe out there. Markets are moving down and volatility is moving up. Sounds like a good time to learn some arbitrage.