No. of Recommendations: 7
The warrant price is gradually increasing, as it is adjusted downwards based on dividends paid out. 2 corrections:
(i) the warrant price is gradually decreasing (and the number of shares that would be issued is increasing), as the rest of the sentence implies. The only thing that stays the same is the $5b that would be paid out to get the shares, likely .
(ii) the adjustment is not based on dividends, it is based on the issuance of further warrants or shares. This is the explanation in the Form 4 from March 2022:
19. The warrants contain provisions that adjust the exercise price and the number of shares of the issuer's common stock issuable on exercise upon the occurrence of certain events. As such, the exercise price and the number of shares of the issuer's common stock issuable on exercise as reported on this form are subject to change upon the occurrence of future events in accordance with the terms of the warrants. The warrants were initially for 80,000,000 shares with an initial exercise price of $62.50 per share. On June 26, 2020, the issuer's board of directors declared a distribution to its common shareholders of warrants to purchase additional shares of common stock, which distribution resulted in an anti-dilution adjustment to the warrants, which lowered the exercise price to $59.624 and increased the number of shares issuable on exercise of the warrants to 83,858,848.81.https://www.sec.gov/Archives/edgar/data/315090/000...One other note: the warrants can be exercised any time, but they expire a year after the Series A preferred shares will have been repurchased by Occidental, at least that's how I understand it:
20. The warrants were issued on August 8, 2019 and are exercisable at the applicable holder's option, in whole or in part, until the first anniversary of the date on which no shares of the issuer's series A preferred stock remain outstanding, at which time the warrants expire.Occidental has now paid down $1.51b of these $10b in preferred shares (with a 10% premium to Berkshire), and they can do so in amounts that correspond to the excess in distributions (which they define as the total of dividends and repurchases) paid out to regular shareholders in excess of $4 per share.
dtb
