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!
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 don't fully know what I'm talking about. So, don't take this a 100% correct. I hope others weigh in to correct me and fill in the gaps.
Assume you bought 1,000 warrants @$10 ($10,000) and say DJT goes to $100. You can exercise your warrants for, I believe, $11,500.
Your stock will be valued at $100,000. You'll have to pay taxes on it as income tax. I don't know exactly how that tax is calculated, but it is still "free upside". Probably not in simple terms, but I believe so, if the gap is significantly larger than $11.5. I think the exact answer depends on how the income tax is calculated, which i don't quite know.
Excluding the idea of selling and accounting for capital gains, I think it's correct to say your bottom line is $100,000 - $10,000 (cost of warrants) - $11,500 (exercise cost) - (whatever is taxable income) = 78,500 - (whatever is taxable income). Again, I don't know how the "income tax" is calculated, but conservatively, let's say it's 25k. Your unrealized gains (using this term loosely) is maybe ~$53,500
Now assume that DWAC was 40 at the time DWACW was 10. Your 10k would have bought you 250 shares. So, if DJT were @ $100 now, your value would be $25,000. Unrealized Gains(loose terminology) would be $15k vs the warrant scenario of ~53k. if it were 33, that's ~333 shares, so 33,300k @100/share ... So 23.3k vs 53k.
Calculating capital gains (short or long) for either of those cases is something to consider and would impact the above picture.