Every month, I’ve started putting out a tweet asking what everyone’s favorite special situation is (here’s this month’s). I can’t claim that’s a unique tweet; plenty of accounts do it. It’s pretty good engagement bait!
That is not how warrants work on almost all deSPACs. On a buyout you will get an exchange based on Black Scholes model so long as at least 30% of the buyout is cash. I don't have a Bloomberg to confirm, but my math tells me the warrants will be about 0.44 if the deal closes at the given price.
PS This was my suggestion in his tweet and it is insane to see it written up here.
I did not know that. Would you mind sharing that language from the warrant agreement? I looked for it, but I don't know my way around these well at all.
The terms are in the "Replacement of Securities upon Reorganization, etc" section.
"The Warrant Price shall be reduced by an amount (in dollars) (but in no event less than zero) equal to the difference of (i) the Warrant Price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined below) minus (B) the Black-Scholes Warrant Value (as defined below). The “Black-Scholes Warrant Value” means the value of a Warrant immediately prior to the consummation of the applicable event based on the Black-Scholes Warrant Model for a Capped American Call on Bloomberg Financial Markets (“Bloomberg”).:
When will the company share the out come of go shopping?
https://investors.adtheorent.com/news-releases/news-release-details/adtheorent-holding-company-inc-announces-expiration-go-shop
Andrew - do you think lack of post-earnings announcement puts higher bid to rest, or were you expecting a last second release this weekend/Monday?
Buy stock + short warrants? They have an 11.50 strike
That is not how warrants work on almost all deSPACs. On a buyout you will get an exchange based on Black Scholes model so long as at least 30% of the buyout is cash. I don't have a Bloomberg to confirm, but my math tells me the warrants will be about 0.44 if the deal closes at the given price.
PS This was my suggestion in his tweet and it is insane to see it written up here.
I did not know that. Would you mind sharing that language from the warrant agreement? I looked for it, but I don't know my way around these well at all.
https://www.sec.gov/Archives/edgar/data/1838672/000110465921022099/tm2039551d4_ex4-4.htm
The terms are in the "Replacement of Securities upon Reorganization, etc" section.
"The Warrant Price shall be reduced by an amount (in dollars) (but in no event less than zero) equal to the difference of (i) the Warrant Price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined below) minus (B) the Black-Scholes Warrant Value (as defined below). The “Black-Scholes Warrant Value” means the value of a Warrant immediately prior to the consummation of the applicable event based on the Black-Scholes Warrant Model for a Capped American Call on Bloomberg Financial Markets (“Bloomberg”).:
You da man! Thank you!
I don’t read the prospectus that way, but it’s prob too risky to justify that trade anyway