If you invest in a company listed on the New Zealand Stock Exchange (NZX) through Sharesies, you might receive warrants or options—on Sharesies, warrants and options work pretty much the same way.
Currently, only some warrants and options from US companies and ASX-listed (Australian Securities Exchange) companies are supported on Sharesies.
What’s a warrant?
A warrant gives existing investors the right to buy additional shares in a company at a set price (‘exercise price’) and time (usually a few years after the warrants are issued). The number of warrants you're issued is determined by the company and is based on the number of shares in the company you already own. Sometimes, warrants are issued as part of a rights offer.
Receiving warrants
Where to find warrants in Sharesies
If you receive warrants that you can exercise through Sharesies, they’ll show in your Portfolio, usually under the name ‘[Company name] Warrants’.
What you can do with your warrants
If available, you can apply to exercise some or all of your warrants (turn your warrants into shares) or do nothing with some or all of your warrants.
Sometimes the warrants are listed on an exchange (like the New Zealand Stock Exchange (NZX)) and you can apply to sell your warrants through Sharesies.
When you can exercise warrants
If available, you’ll usually have a few years to exercise your warrants before they expire, but sometimes the company will specify when you can exercise them within this time. For example, a company might restrict you from exercising your warrants until a number of months after they’ve been issued. Or, you might only be able to exercise your warrants during the last month before the expiry date.
If there are no restrictions in place, you can submit an application to exercise some or all of your warrants for an offer available through Sharesies at any time. We typically process applications every three months—at the end of February, May, August, and November each year. We may process applications at other frequencies. Once your application has been processed, your new shares will typically be allocated within ten days after the three-month period ends.
Unexercised warrants
If you choose to do nothing with your warrants, they will be removed from your Portfolio once they expire and your percentage ownership in the company may get diluted.
Exercising warrants
If the option to exercise your warrants is available, and you wish to do so:
Go to your Portfolio and select “[company name]’s Warrants”.
Select Exercise.
Enter the number of warrants you want to exercise, then review and confirm your application.
You’ll need enough money in your Sharesies Wallet at the time of your application. If you need to convert currency to pay the offer price, you’ll need to pay a currency exchange fee.
Selling warrants
If the option to sell your warrants is available, and you wish to do so:
Go to your Portfolio and select “[company name] Warrants”.
Select Exercise or sell, then Sell warrants.
Choose your order type (market or limit).
Enter the number of warrants you want to sell, then review and confirm your order.
If your order fills, Sharesies fees apply.
The warrant’s selling price may change over time—however, they still represent the right to buy additional shares at the exercise price.
Whether or not your sell order for warrants fills (and how long takes) will depend on how many buyers and sellers there are for the warrants.