MITRA: Share Split + Bonus Issue + Free Warrant !!!

During the lunch break, MITRA proposed :

i) one-into-two share split
ii) after split, bonus issue of 1 share for every 2 shares held
iii) free 1 warrant for every 8 shares held

The stock is suspended from 230pm until 330pm today.


My view:
At the first glance, it seems like everything is free. Normally, bonus issue is enough to influence share movement upwards. This one is 3 in 1!!! Split + Bonus + Free Warrant! Where to get? I think RM2.00 should serve as the ceiling for the stock for the evening trading based on: i) psycological ceiling, ii) historical PER of 6.21x. If MITRA can break RM2.00, then RM2.20 shall be the next resistance.



A closer look however shows that MITRA has warrant which will mature on 12-Feb-2011 with the last date of exercise is 11-Feb-2011 5pm (Friday). The exercise price for this warrant is RM1.80 and is convertible into mother share.

If you are a warrant player, calculating the fair value of MITRA-WB is quite straight forward, just minus RM1.80 from the mother share assuming 0 time value for the warrant. E.g. if mother share is RM2.00, then MITRA-WB should worth RM0.20.


Last point is it is very rare to see Company which suspend a counter for 1 hour! How can investor use 1 hour to determine the effect of the Company?