I am holding a large number of instalment warrants which are due for resetting. Unfortunately the underlying share price and hence the warrants, have plummeted. I have 3 options:
1. Let Macquarie (the issuer) sell down 50% of my warrants to keep me in the game. Result - I immediately lose 50% of my holding.
2. Pay the rollover amount to maintain the same number of instalments. Result - I have to pay $22,000 to maintain this holding - $10,000 is an immediate loss because it is interest payable upfront.
3. Pay $96,000 and buy the underlying shares and hope the share price recovers in the next few months. (These are Newscorp shares by the way).
My gut instinct is to stay cool and pay the $96,000 to take ownership of the shares and see if the share price recovers.
The problem is I will have to raid every credit card and other places to raise this money. Does anything think buying the shares in the hope that the price might recover is a foolish way to go?