time value

HKC made its low at 2.08 today (dec 13) on the back of a general retreat of mainland property developers. among others, 雅居樂 dropped 4.04%, 碧桂園 -5.45%, 富力 -7.60%, 華地 -7.39%, 中海外 -4.3%, 港建埋單收跌6.2%到. support at 2.27 earlier was proved to be not as significant as the level at 2.05 where cerberus/penta came in. maybe, the market is smart enough to take Mr.Oei's purchase at 2.27 as only his sincere commitment to the firm only?! the price tested the 2.01 level back on nov22 with a daily close at 2.09 that day, volume was 31.42 million shares back then. it looks like 2.00 is a very important level for the moment, technically speaking, although fundamentals of the long-term development of HKC is believed to remain sound.

warrant 314 fell to 0.75 lowest - comparing that to the low of 190 at 2.08, that's pretty much what the market views now as "time value" of this warrant, as the exercise price is 2.05. HKD0.75 for an at-the-money warrant with a life of 2 years, is what we can assume for now. the premium of 314 shot up to new high of 33.80% relative to the stock itself. all in all, after the warrants got listed on dec 4, the share of 190 dropped from 2.46 to 2.13 while the warrant refused to go down as much and premium got adjusted to a wider level. trading volume of the warrant shrank further to less than 2 million warrants.

who's still holding this "freebie" warrant if it's a bonus from the company? this would be the first thing small guys sell in case of any chicken run, and it however turns out that its price reacted as a widening of premium only, though absolute price fell in line with the stock itself.

anyone got any thoughts?