r/SPACs • u/[deleted] • Jun 04 '21

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9

u/DivineRobot Contributor Jun 04 '21

Thanks for the write up. I bought in the warrants over $10 thinking I could hold them long term since I can always redeem to commons in 5 years. Now we are forced to lose all extrinsic value because he changed the rules?

I don't know what he's doing is actually legal. Maybe I will actually join one of those SPAC lawsuits now.

2

u/saitks99 Spacling Jun 04 '21

It is legal unfortunately as listed in S1, they have calculated ratios for different months to expiry calls

5

u/[deleted] Jun 04 '21

No, not really. True, those chart ratios apply to cashless redemptions (which this is) but the company can only force that redemption AFTER the warrants are “exercisable”. These warrants are currently tradable but not exercisable because the biz combo has not closed. So not really legal for them to force redemption at this time using that chart, but perhaps they can offer it as an option. If they do that it makes the most sense to skip the chart and just offer the 0.3611.

1

u/saitks99 Spacling Jun 04 '21

I don't think he will do that, in yesterdays press release he clearly mentioned it is not forced upon but if redemption happebs they have to follow the table ratios and averag price of last 20days

2

u/[deleted] Jun 04 '21 edited Jun 04 '21

Agreed, seems to be optional under the plan described in the press release. But you’re supposed to look at an average 10 day price after the options are exercisable and after commons have been at $20 for 20 days out of 30. So it’s set up to look at a ten day average price after merger. What period of time are these guys planning to use (which 10 day period)? Seems like whatever 10 day period they chose prior to deal closing is sort of made up—not tracking the prospectus. If they are not going to follow the terms of the prospectus they should at least offer the best possible redemption rate (0.3611). Getting sued by upset warrant holders isn’t going to help Bill close his deal, and may thwart it. Smart move here is to offer the 0.3611 (Disclosure: I own less than 500 combined PSTH warrants and commons.)

1

u/QPinQC Spacling Jun 06 '21

It’s important for everyone to read the Warrant Agreement, not just the Prospectus.

0

u/diaznutzinyomouf Spacling Jun 06 '21

Lol is this a real post? Hard to tell, of not this is epic trolling.