What is a Warrant regarding business terms?

Question

I am wondering what a warrant(s) are regarding the creation of a new company or dealing with stock holders, principal partners of a new firm.

Thanks.

Answer 1

A warrant is useually attached to a share offering.
If someone subscribes to a share offering they get the shares plus a warrant to buy a half a share for each they buy or a whole share for each they buy , sometime in the future at a certain price. So if shares are on the market at $1, maybe the offer is to sell Shares and 1/2 Warrants with share cost $1 and warrants to get 1/2 share in 2 years for price of $1.25 per share...it is an incentive to buy from company and not from market.

Answer 2

A warrant is a right issued to stockholders to purchase the stock of that company at a certain price over or after a specific length of time.

New issuers of stock (IPOs) sometimes will attach warrants to the new shares to encourage investors to buy more stock at a later date. The warrant acts as a "sweetener" to add to the value of the new shares.
If the price of the stock has gone up, the warrants can be exercised to buy the stock at a lower price than the current market value.
If the market value of the stock goes down, the warrants may expire worthless at a future date

Answer 3

Shoot Gotham, I wanted to know to and that's why I came. There are things in the stock market called "puts" and "calls" and they relate to gambling in a sense on the future value of a stock. If you made a deal to "borrow" a hundred shares of stock and deliver it on a set date and the stock fell in value and you return it on said date --- you keep the difference. A warrant fits in here somewhere.