What are the tax implications for employees exercising the warrants and for the company?

Tax side‑effects

For the employees: When a Genmab employee exercises an employee‑warrant (or stock‑option) the tax treatment is essentially the same as for any “non‑qualified” equity compensation. The spread between the market price on the exercise date and the exercise price is treated as ordinary‑income (subject to personal‑income tax and payroll‑tax withholding). In jurisdictions that apply a “alternative minimum tax” (e.g., the U.S.) the same amount may also trigger AMT liability. If the warrants are classified as qualified (in‑centive) stock options, the spread is still ordinary income at exercise, but the employee can defer the capital‑gain component until the shares are sold, potentially reducing the effective tax rate. In any case, the employee must report the income in the tax year of exercise, and the company will issue a Form 1099‑B (or local equivalent) showing the taxable amount.

For Genmab: The firm must recognise the fair‑value of the warrants at grant as an expense over the vesting period (share‑based‑payment accounting, IFRS IFRS 2). When the warrants are exercised, the company records a cash‑in‑exchange for equity and removes the outstanding liability. The expense already recognised reduces pre‑tax earnings, but the cash received is not taxable as income; rather, the dilution of existing shareholders is reflected in a higher share‑capital base. The net‑effect on the corporate tax return is neutral, although the company can deduct any cash‑less‑‑share‑issuance costs (e.g., underwriting fees) as ordinary business expenses.

Trading implications

The capital increase will expand the free‑float and likely trigger a short‑term liquidity‑driven price swing as new shares hit the market. Technically, the post‑exercise price may test the pre‑exercise high‑low range (e.g., the recent resistance at €45) before finding a new support level around the diluted‑share‑adjusted valuation. From a fundamentals perspective, the dilution is offset by the cash inflow and the removal of a future expense line, which can improve the EV/EBITDA multiple if the proceeds are used for growth‑capital or R&D.

Actionable insight: Anticipate a modest‑to‑moderate downward pressure on GEN’s price in the next 1‑2 weeks as the market digests the dilution, but look for a bounce once the new capital is absorbed and the company’s earnings guidance reflects the net‑benefit of the warrant exercise. A short‑position at the current level with a stop just above the pre‑exercise high, or a buy‑on‑dip if the price breaks below the adjusted support, could capture the expected volatility.