No. of Recommendations: 2
Beginner,
OXY has a FAQ on the warrants, which should answer your question about how they work.
oxy.com: PDF documentI don't remember what Buffett said about the publicly traded warrants. He did disclose that he sold them as soon as he received them, as he was required to by regulations.
Buffett probably prefers owning the equity to get the dividends. Warrant holders don't get any dividend or have voting rights. That's why there is hardly any premium for the warrant, only about $0.20 or so. Plus he would not be able to buy 25% of the company just buying warrants.
If someone acquires the company, both equity holders and warrant holders will benefit. Remember warrants can be converted any time till June 2027 by instructing your broker and paying $22 per share. So warrant prices will go up lock step with the equity price and you could sell your warrants on the market at any time.
