Capital One Financial Corp. warrants held by the U.S. government’s bank bailout program sold for $146.5 million in the first auction designed to reward taxpayers for helping rescue the financial system.
The 12.7 million warrants given to the Treasury Department’s Troubled Asset Relief Program last year sold for $11.75 each, the department said today in a statement. Linus Wilson, an assistant finance professor at the University of Louisiana at Lafayette who tracks TARP returns, had estimated the warrants were worth $227 million to $376 million.
Related (vaguely):
TARP Warrants: Linus Wilson Analysis Flawed
Agreed, his midpoint is twice what the market is prepared to pay, volatility assumption way off.
That price represents a reasonable long term implied volatility level. I’m guessing Linus Wilson just extrapolates off of current short-term implied volatilities.