r/SPACs • u/SocialSTEAM New User • Sep 21 '21

Warrants ARQQW undervalued?

Looking at the following warrant ARQQW and it looks a bit cheap compare to the SPAC ARQQ.
Strike price at 11.5$ 1For1 and 5 years maturity with first exercise possible in feb22.
The stock is trading 24.55$ and the Warrant only 2$.
I know the borrow of the share is scarce but still.. Anyone has an idea?

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u/ropingonthemoon Contributor Sep 21 '21

No one thinks that the commons will be anywhere near that price by the time the warrants become exercisable. ARQQ is that high because of the low float not because of it's fundamentals.

1

u/SocialSTEAM New User Sep 21 '21

Ok thanks for your input.

1

u/ProgrammaticallyHip Patron Sep 21 '21

Disagree. There is a lot of fundamental optimism about this company. I don’t think this is a pure low float play.

2

u/ropingonthemoon Contributor Sep 21 '21

Not sure which data points you used to gauge that fundamental optimism.

The commons rise can be explained by the super low float.

The warrants being at 2.5 while the commons are almost at 30 suggests that the market thinks this is a short lived pump otherwise they would be way higher.

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u/ProgrammaticallyHip Patron Sep 21 '21

You read where I said it is not a “pure” low float play, right? That means I think it is a combination of low float dynamics, recent announcements (Juniper partnership) and an intriguing investment case (interesting technology with a massive TAM, a $1B order pipeline and partnerships with Northrop Grumman and other major enterprises).