Does anyone know when the last day is to buy warrants?
Also am I understanding correctly that warrants are almost “free money” given that you can buy them for 27.70 and then I believe 11.50 a share at a later date when it is trading at 66 a share? Or is there still risk involved?
This is my first time ever having warrants so I want to get a professionals understanding of it if possible!
https://www.reddit.com/r/DWAC_Uncensored/comments/1asirzl/dwacw_warrants_understanding_the_process_and_risks/
Tl:dr : 1-2 months from now.
MAKE SURE YOU EXERCISE THEM WHEN AVAILABLE.
I find it very puzzling as well fren that the warrants still trade at such a discount.
I definitely weighted my investment much more towards the warrants and am attempting to exercise them but apparently there is still some paperwork before that option is available. As soon as I'm able to exercise I'll notify if there were any "gotchas".
Yeah because I’m like honestly what is keeping me from dumping almost every other holding into it or at least a lot of it since my understanding is that basically it’s just free upside to gain. Seems really strange. I thought warrants would be gone the day it merged.
I read somewhere that there would be a 30 day waiting period right after the merge, no sauce on that though sorry
That's called Arbitrage
Well except here the product is slightly different (warrant vs share) and the value gap seems very wide when most arbitrage opportunities aren't that fat.
So what OP and I are trying to understand is why this arbitrage opportunity seems so rich? Seems like we are missing something given that it is not an obscure name.
Taxes are to be figured in but I'm doing all my DWAC investing in the 401k realm so things are simplified.
I expect as we get closer to the date when the exercise window begins, that the price gap between shares and warrants will lessen.
Once we reach that date, then the price gap should finalize to warrants trading for $11.50 less than shares, or within pennies of that.
I believe that exercise window opens 30 days post merger, but I’m unsure if that’s calendar days, or trading days. Tomorrow will not be a trading day, as the market is closed in observance of Good Friday.
I have 4x as many warrants as I do shares, so I’m sitting tight until the price gap closes.
EDIT: I didn’t really answer the question of WHY the price gap is currently so large. I suspect the average retail buyer isn’t even aware of the warrants, and big $ Wall St. investors are waiting to see if the corrupt short sellers can tank the stock before the exercise window opens.
EDIT 2: I just read the Reddit link at the top of the comments here, and it does a great job of explaining things. Unfortunately, according to that article we will be waiting longer than 30 days, and more like two months.
Yeah I have 200 warrants. I'm confused as well. We better not get screwed somehow. When can we turn these into regular stock? How do we start? What do we do?
Here is the SEC filing. This spells out in great detail, every detail, of the warrant contract.
https://www.sec.gov/Archives/edgar/data/1849635/000110465921090302/tm2117087d2_s1a.htm#:~:text=Each%20whole%20warrant%20entitles%20the,only%20whole%20warrants%20will%20trade
It's bed time reading but very important that you understand your investment.
My suggestion for those not familiar with warrants is that you read over the document over the span of a few days. Print the document. Add a blank sheet in between each page of that document and us it as a study filing. When you run into a term you're not familiar with, stop, research the term and jot down some notes on the blank sheet.
Here is a good source for your research.
https://www.investopedia.com/
Take advantage of the menu bar and search feature. The body of knowledge on that site is vast and anything "stock market" can be found there.
Hope that helps.
So, can we purchase a share at $11.50 each or are there other factors?
"Each whole warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as described herein. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. The underwriters have a 45-day option from the date of this prospectus to purchase up to an additional 4,500,000 units to cover over-allotments, if any."
'subject to adjustment'
Meaning that there may be an adjustment if shares are split or dividends issued etc. Splits and dividends affect the price of the common shares so an adjustment may be made in those instances. To my knowledge, none of that has taken place with this security.
*Not advice. Please read the SEC filing for terms.
Thank you
Probably smart to just buy out the warrants right after the 30 days is up then.
I was told we have like 5 years after purchase to exercise the right to trade them for real stocks for 11.50 per share. So, if you hold for another year or few years, they might be worth more. If you don’t want to get real stocks, you can just sell them for whatever the going rate is for the warrant. Be careful and check with your broker for expiration date of warrants when they turn worthless.
$200 target from cup and handle pattern. Trump will have $15 billion if that happens.