Asia Entertainment (NASDAQ:AERL)

Asia Entertainment is redeeming its warrants:

"it will be sending out redemption notices to all of the record holders of its issued and outstanding ordinary share purchase warrants, which trade under the ticker symbol AERLF. The final redemption date for the warrants will be October 28, 2010 (the “Redemption Date”). The warrants are currently exercisable. Holders of warrants who have not exercised them by the Redemption Date will be paid $0.01 per warrant, and the warrants will be extinguished.

In accordance with the Warrant Agreement governing the warrants, AERL is entitled to redeem these warrants because the last sales price of its ordinary shares was $8.50 or greater for more than 20 of the trading days within the last 30 day trading period ending on the third business day prior to the notice date of redemption sent to warrant holders of record, and because there is a current and effective registration statement covering the ordinary shares underlying the warrants. The closing price of the AERL’s ordinary shares on June 24, 2010 was $7.50.

The underlying common stock has a wide bid/ask spread that currently stands at $2.25 by $9.60. The warrants have a strike price of $5.00. The arbitrage opportunity that potentially existed with the warrants will evaporate, unless the bid price rises above $5.00 before the redemption date.