Warrants
Warrants
Warrants
are very much like subscription rights in that they are usually used to purchase
stock for less than what the stock is currently worth, or the current market value. Warrants
differ from subscription rights in that subscription rights entitle the bearer to deduct a certain
amount from the price of the stock, whereas warrants entitle the bearer to purchase the stock
at a predetermined price, regardless of the current price the stock is selling for on the open
market.
Plain English
Warrants are a type of financial instrument distributed by the company that
originally issued the corresponding stock. The warrants grant the bearer the right to
purchase that company's stock at a predetermined price, regardless of the market
value of the stock at that time.
