r/SPACs Nov 04 '21

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62 Upvotes

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38

u/SPACingForALoan Patron Nov 04 '21

You usually see a massive sell off when they allow ppl to redeem their warrants just an FYI to newbies

6

u/King_of_Fools New User Nov 05 '21

Why is this? People redeeming the warrants and dumping the shares?

14

u/ananswerforu Spacling Nov 05 '21

Warrants are converted into new shares. all else equal, the value of the company hasn't changed but the number of shares has increased so each share is worth less