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re: Special Purpose Acquisition Company (SPAC) Discussion
Posted on 6/25/20 at 12:47 pm to hiltacular
Posted on 6/25/20 at 12:47 pm to hiltacular
ACTT/FREE sucks balls once again
1
Posted on 6/25/20 at 2:27 pm to LChama
Maybe SPACs aren't for you.
No clue where FREE is going from here, but there's always a delay when switching tickers and it usually leads to low volume.
No clue where FREE is going from here, but there's always a delay when switching tickers and it usually leads to low volume.
This post was edited on 6/25/20 at 2:28 pm
Posted on 6/26/20 at 3:34 pm to TheChosenOne
GRAF/ GRAF+
I'm in this one. Has big potential. Need to do more research.
-- Only rumors from Bloomberg though.
SHLL had a nice day.
I'm in this one. Has big potential. Need to do more research.
-- Only rumors from Bloomberg though.
SHLL had a nice day.
This post was edited on 6/28/20 at 12:45 am
Posted on 6/27/20 at 12:36 pm to LSUregit
Talk to me here. There seems like an arbitrage opportunity on some of these SPACs, but I’ve never split units, so I don’t know how much work it is and if that work is worth it.
Say a unit is priced at 10.30, the share is priced at 10.10, and the warrant is priced at .70
That’s a .50 difference in the unit value and the implied share+warrant value. Assuming you purchase 2000 units, split them, then sell the shares and warrants, that’s a 5% return— plus or minus 2% with potential volatility.
This may not be worth the effort, but if a spread could yield a 10+% arbitrage return, it may be worth the effort and risk.
Say a unit is priced at 10.30, the share is priced at 10.10, and the warrant is priced at .70
That’s a .50 difference in the unit value and the implied share+warrant value. Assuming you purchase 2000 units, split them, then sell the shares and warrants, that’s a 5% return— plus or minus 2% with potential volatility.
This may not be worth the effort, but if a spread could yield a 10+% arbitrage return, it may be worth the effort and risk.
Posted on 6/27/20 at 1:01 pm to TheChosenOne
Yeah, my understanding is that there are firms that take advantage of that arbitrage.
Posted on 6/27/20 at 8:50 pm to TheChosenOne
When NKLA was approaching $90, I was able to rack up on NKLAW for $28. On July 3rd, I can pay $11.50 to turn the warrants into shares. It seemed too good to be true. We'll see how it shakes out, though.
This post was edited on 6/27/20 at 9:26 pm
Posted on 6/27/20 at 11:22 pm to TheChosenOne
Not all perceived violation of parity is glitter and gold.
Your scenario sounds good in theory but there are way too many variables. Initially, most SPACs will trade as units. Those units may be comprised of one share of common stock and warrant, but that may be 1, 1/2, 1/3 of a warrant, and that warrant may be redeemable for full or only 1/10, 1/2, 3/4 or such fraction of common.
Even if all are equal 1:1, The units, commons, warrants and rights all trades individually at any given minute with much volatility. That's not even taking into account the stock's significant disparity down the road due to maturation, cycle, implied risk, hype, market reaction, fair/intrinsic time value, leverage of warrants and the fact that they're not even exercisable, then cash, cashless etc.etc.
Some brokers can split the units into common stock and warrants when available prior to merger but, depending on the stock and amount of shares, they may charge a fee negating your arbitrage opportunity example. The low risk/high reward arbitrage is parking shares at net asset value as I mentioned earlier.
Your scenario sounds good in theory but there are way too many variables. Initially, most SPACs will trade as units. Those units may be comprised of one share of common stock and warrant, but that may be 1, 1/2, 1/3 of a warrant, and that warrant may be redeemable for full or only 1/10, 1/2, 3/4 or such fraction of common.
Even if all are equal 1:1, The units, commons, warrants and rights all trades individually at any given minute with much volatility. That's not even taking into account the stock's significant disparity down the road due to maturation, cycle, implied risk, hype, market reaction, fair/intrinsic time value, leverage of warrants and the fact that they're not even exercisable, then cash, cashless etc.etc.
Some brokers can split the units into common stock and warrants when available prior to merger but, depending on the stock and amount of shares, they may charge a fee negating your arbitrage opportunity example. The low risk/high reward arbitrage is parking shares at net asset value as I mentioned earlier.
Posted on 6/28/20 at 10:35 am to LSUregit
Got it, makes sense.
Posted on 6/28/20 at 10:39 am to TheChosenOne
So can you break down how you get in at the beginning. Seems the tickers you are posting have already been through that phase. Also i seem to keep reading about the downside limit.. it seems like thats only in place for this phase also?
Posted on 6/29/20 at 8:21 am to LSUregit
Cashed in on SHLL last week, today INSU is taking off. Just need CRSA to do something to complete the hat trick....
Posted on 6/29/20 at 10:07 am to The Mick
What a run for SHLL. I may scale some back today. I sold CRSA couple of days after announcement. No one is excited about a gym ipo during Covid.
Posted on 6/29/20 at 12:17 pm to LSUregit
quote:LOL, agreed.
No one is excited about a gym ipo during Covid.
Posted on 6/29/20 at 1:17 pm to The Mick
Anybody riding the LCA-Golden Nugget online betting train?
With the other online gaming hype and Tillman Fertitta's name, it should jump once the merger is official and the PR starts pumping.
With the other online gaming hype and Tillman Fertitta's name, it should jump once the merger is official and the PR starts pumping.
Posted on 6/29/20 at 2:00 pm to TheChosenOne
I think they're $. One of the few warrants I'm not in and of course it's up over 400% today.
Posted on 6/29/20 at 2:50 pm to LSUregit
Thanks for posting OP, my apologies for stumbling across this a little late. Would you happen to have a list of warrants to research that have the potential to move up from here? Any potential websites to explore? Any help would greatly be appreciated!!
Posted on 6/29/20 at 3:11 pm to clickboom
Most warrants I own is up over 30% today with no news so don't buy in too high. I'll probably sell some and buy back lower. This is a good website to start. Spacinsider
Look at management, target industry and time left to acquire target. Ex: I been loading up on SPAQ+ expecting some news in the near future so it can moon. If they eventually announce a merger that I like, I'll buy the common shares also. If it's a company I deem subpar, I'll wait for the hype to fade then sell.
- It's like shooting fish in a barrel once you fully grasp the concept of SPACs.
Look at management, target industry and time left to acquire target. Ex: I been loading up on SPAQ+ expecting some news in the near future so it can moon. If they eventually announce a merger that I like, I'll buy the common shares also. If it's a company I deem subpar, I'll wait for the hype to fade then sell.
- It's like shooting fish in a barrel once you fully grasp the concept of SPACs.
This post was edited on 6/29/20 at 3:14 pm
Posted on 6/29/20 at 4:49 pm to LSUregit
I hope you still grabbed some LCA warrants before the close. Based on AH action, it looks like it's the next runner.
This post was edited on 6/29/20 at 9:23 pm
Posted on 6/29/20 at 5:33 pm to LSUregit
Thank you for the info!
Posted on 6/29/20 at 7:55 pm to LSUregit
Thanks for setting up this thread and explaining everything LSUregit.
Just a random question on Spac warrants in general. Is it generally always a 11.50 per share strike/buy in cost to convert them to shares, or does that vary (from looking I noticed some do half share instead of full shares on warrants).
Also, what are you thoughts on nfin/nfinW?
Just a random question on Spac warrants in general. Is it generally always a 11.50 per share strike/buy in cost to convert them to shares, or does that vary (from looking I noticed some do half share instead of full shares on warrants).
Also, what are you thoughts on nfin/nfinW?
Posted on 6/29/20 at 10:11 pm to auyushu
Varies depending on company's Prospectus but spacs are generally $11.50 strike (unless you're Ackman).
NFIN seems very interesting with potential to run short term but won't be a meme stock.
NFIN seems very interesting with potential to run short term but won't be a meme stock.
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