Also known as: stock warrants · warrant
Written by attorneys · grounded in primary & secondary sources — see below
An instrument granting the holder a long-term option to buy shares at a fixed price. It is commonly attached to preferred stocks or bonds.
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Sapphire Holdings issued stock warrants to early investors allowing purchase of additional shares at a set price after five years. The investors later exercised the warrants when the stock price rose substantially. This gave them the right to acquire shares without negotiating a new purchase agreement.
Stonehaven Properties attached stock warrants to a bond issuance to attract buyers. The warrants entitled holders to purchase common stock at a predetermined price years later. When the company succeeded, the warrants became valuable separate from the bonds.
Sentinel Security granted stock warrants to key employees as part of their compensation package. The warrants vested after three years and allowed purchase at the grant-date price. Several employees exercised them after the company's valuation increased.
Solstice Ventures received stock warrants alongside preferred stock in a financing round. The warrants provided the right to buy common shares at a fixed price if the company went public. This structure protected the investors against dilution.
Sapphire Holdings transferred outstanding stock warrants to the acquiring company during a merger. The new entity honored the warrants under the original terms. Holders could still exercise them for shares in the successor corporation.
Stonehaven Properties issued stock warrants that expired after ten years without exercise. The holders lost the opportunity to purchase shares at the favorable price. The company retained the shares that would have been issued upon exercise.
Stock warrants usually grant a long-term option, often five to ten years, to purchase shares at a fixed price.
Yes. They are frequently attached to preferred stocks or bonds to make those securities more attractive to investors.
If not exercised before expiration, the warrant loses all value and the holder forfeits the right to purchase the shares.
…after they shall have been signed by the President and that the seal shall not be affixed before signature. The signature is a warrant for affixing the great seal and the great seal is only to be affixed to an instrument which is complete. The commission being signed, the subsequent duty of the Secretary is prescribed by…