Dec. 31 at 6:09 AM
$CRGO $CRGOW buy-back provisions limit the upside potential of Freightos warrants should the stock rise above a fixed trigger price, which I believe is about
$18.00 per share. This limits their upside potential.
From the perspective of the warrants holder, CRGOW behaves like a European call option when it is out of the money, but as the warrants come to have intrinsic value, its upper bound is capped. Ceteris paribus, CRGOW should be worth less than an equivalent, long-term call option because of this, especially after it goes into the money.
From the perspective of the company, it is a good thing to have the price of the stock rise so that the warrants can be exercised, and the warrants raise capital if they are exercised. However, if the SP rises a great deal, reaching the buy-back trigger price, raising additional capital is probably less of a concern to the company. If so, the company might be better off raising through ATM markets, and it might even be buying back shares.
