Warrants are basically options to buy a stock at a predetermined price. If you decide to redeem the warrants, you may be able to get a stock that has risen greatly in value at a huge discount. If the stock drops low enough, it may make little sense to redeem them if you could just buy the stock for less than it would cost to redeem warrants. The downside is you lose whatever you have in warrants if you don't redeem by their call date. Hope that explanation helps.