HODL the line !!
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This is the language from the SEC filing:
This is referring to the Unit - DWACU I believe. And the next line explains what a warrant is:
That to me reads as one DWACW allows you to purchase on DWAC. Please let me know if I am reading this wrong. Its possible I havent read the remaining conditions in the rest of the document.
From the 8K filing on 9/27: "No fractional warrants will be issued upon separation of the units and only whole warrants will trade."
So 2 DWACU = 2 DWAC + 1 DWACW, but 1 DWACU = 1 DWAC. Along with that 1 DWACW + $11.50 = 1 DWAC.
Yep, thats my read too.
BTW, do you know the conditions for converting DWACW+$11.50 -> DWAC ?
Can we do it anytime? Can it be done only after merge? How do you do it?
Think it's available anytime, you have to call your broker and ask them to start the redemption process though.
From the SEC filing...
The warrants will become exercisable on the later of:
provided in each case that we have an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement).
As I understand it...
DWAC is the 'regular stock' (Class A Common)
DWACW are the half-warrants - you need a 'full warrant' (two DWACW's) to have a full warrant, and therefore the right to buy one (normal) DWAC at $11.50 (Note that this can only take place after a certain time period, and/or after the merger, etc - which is why these are worth a little less than a straight formulaic conversion from DWAC -- a bit more 'risk'.)
DWACU are 'units' - kind of a 'combo pack' - one DWAC and one DWACW
The description above matches (closely) to the closing price ratios of each item. (In other words, if DWACW's were full warrants, they would be at nearly double the price.)
From the 8K filing on 9/27: "No fractional warrants will be issued upon separation of the units and only whole warrants will trade."
So 2 DWACU = 2 DWAC + 1 DWACW, but 1 DWACU = 1 DWAC. Along with that 1 DWACW + $11.50 = 1 DWAC.
Thanks, I finally figured that out.
Any idea why DWACW's are trading so low then? (Compared to DWAC)
If I had to guess, trading frenzy in the short term along with the DWAC ticker being dropped in the announcement, but not DWACW. If you're inclined for long term HODL, DWACW seems like a steal.
I just re-read (scanned) the SEC filing - I may be wrong about DWACW's being half warrants. It looks like only the DWACU (Units) issue half-warrants, but once the warrants are traded, they are only traded in whole amounts. But that does not line up with the current valuations relative to each other. Strange.
Either way, I think the 'explosive' portion of the 'warrant train' might be over. When you could get them at $0.50, then you could see 2000% growth. Now it is only slightly (15%) better than going with straight DWAC (and does not have the conversion restrictions).
Again, I am not a trader.
Thanks for the clarification, greatly appreciate it.
Definitely. I put in order before markets opened and the warrants were already trading at $4. For me, though, warrants are less about explosive growth and more about hedging my bets. If I spend X amount on warrants, it allows me to invest 10X later on in future when the merge happens, TMTG shoots to the moon and what not. But if none of that happens, I only lose X and not 10X
(The factor of 10 is just an example, in reality that factor depends on where the stock price and warrant price are)
Yes sounds about right. It sounds like options. I just got the Classic DWAC but didn’t jump on the W or U bc I’m not familiar with how those work.
When is the merger supposedly going to happen? Also what happens (I know, dark thought) if the merger doesn’t go through? Does DWAC go back to the original price ($9.50?) and you can still sell it back?
The merger needs to happen within 18 months. My guess is that the company needs to launch and do well to be valuated at the same amount of money the SPAC raised, and at that time they will merge it.
You get back $10 for each DWAC share, but you lose the rest you paid. Also you lose the money for any warrants you bought.