I received a Voluntary Warrant Exercise offer to convert 15 warrants to common shares at $11.50 per share for a total cost of $173.
The warrants held were trading at $18 each with a cost basis of $32 for a total cost of $480. Taking the offer appeared to offer some relief on the current loss. Not fully understanding the accounting and/or the rationale of the process, I agreed to act on the offer.
Merrill's agent advised me that I would have to pay an additional $173 plus a $30 fee for a total of $203. Thinking that the funds would be reversed at the completion of the conversion, I agreed and provided the additional funds. Today's Gain/Loss statement shows my cost basis per share is $43 per share for a total cost of $649.
In retrospect, I could have sold the warrants at market at $18 each and taken my loss. Then I could have purchased the common at $30 for a cost basis of $30 each. Can you help and explain the accounting and was the conversion handled properly.