Yesterday, the Treasury put up more than 12 million warrants for Capital One Financial Corp. stock for sale at an exercise price of $43.13.
So who’s a possible buyer of the warrants? Try Cap One. Cap One writes in its prospectus:
As the prospectus states, an exercise price of $43.13 per share means Cap One’s “stock price would have to be more than $49.63 for [the investor] to have an opportunity to exercise the warrants and achieve a positive return on … investment.” (Deutsche Bank is running the secondary offering for Treasury.)
COF closed today at $38.35 per share. I can see the spreadsheets churning already.