Hi, Shrewd!        Login  
Shrewd'm.com 
A merry & shrewd investing community
 Best Of BRK.A | Best Of | Favourites & Replies | All Boards | Post of the Week!
Search BRK.A
Shrewd'm.com Merry shrewd investors
Best Of BRK.A | Best Of | Favourites & Replies | All Boards | Post of the Week!
Search BRK.A

Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
Unthreaded | Threaded | Whole Thread (14) |
Author: rnam ✧  😊 😞
Number: of 15062 
Subject: Re: Done buying OXY?
Date: 06/22/2023 5:34 PM
Post New | Post Reply | Report Post | Recommend It!
No. of Recommendations: 2
I presume the apparent cheapness is because you're not getting the dividends that the common will get.

I agree the real cost of the warrants, as compared to equity, is the foregone dividend. It will be hard to estimate this for OXY, because of the complicated agreements they have to redeem the Buffett warrants (not traded and different from OXY+) and other capital allocation decisions.

But OXY+ is still much more attractive than any call option. Even the $23 Jan 2024 option has a higher cost than the OXY+ $22 August 2027.

And if dividends are higher than forecast you can exercise the warrant or sell it. For US taxpayers, warrants held over a year benefit from LTCG treatment, while options get STCG treatment irrespective of holding period.
Post New | Post Reply | Report Post | Recommend It!
Print the post
Unthreaded | Threaded | Whole Thread (14) |


Announcements
Berkshire Hathaway FAQ
Contact Shrewd'm
Contact the developer of these message boards.

Ticker or Board Name Author

Best Of BRK.A | Best Of | Favourites & Replies | All Boards | Followed Shrewds