The intention was to publish the report before the readout, but the new financing package complicated things so much that practically everything had to be recalculated and models updated. On the other hand, the new financing package combined with market movements led to a heuristically very easy decision to sell warrants and buy shares. The market’s reaction to the financing package was thus peculiar, and I aimed to show visually how the warrant game was practically played even then, although the market was still pricing warrants highly.
The outcome was a shame for all parties involved, but no one is bitter towards anyone here. The probability of success in the market has varied between approximately 30 and 60 percent, so failure was very possible. Few also played for deterministic success, but only for a probability greater than the market’s estimate. In that game, reflection can only be done by considering ex ante data and deriving the probabilities priced by the market, and then choosing the best way to play for one’s own – differing from the market’s – view.
Thanks to all commentators, this was an interesting case, and everyone has certainly learned something along the way.
I aim to publish the next piece within a month. Here’s an article from last summer. The financing solution naturally ruined part of the logic, but the article should be understood as a product of its time.