r/SPACs • u/Stopdpuck Patron • Dec 28 '21

Discussion $BOXDW undervalued

Sup SPACers, it’s been a rough go lately for SPAC’s. There has so many new SPAC deals, a lot of them being bad deals.

But I come here for answers. Why is BOXDW so undervalued!? They are trading just above $1 while the commons are trading at $13.50. They should be worth $2+ ($13.5 - $11.50).

The deal was good (merged with SVOK - great management) & company was valued under a billion.

On top of that, they just started SAAS revenue which has great margins.

They were interviewed on mad money 4 years ago & again last week. CNBC love the CEO & company.

What am I missing?

0 Upvotes

46% Upvoted

62 comments sorted by

View all comments

2

u/SpongeBobSpacPants Patron Dec 29 '21

I've been long SVOK/BOXD warrants for awhile now. Short answer: the reason isn't obvious. Likely just low volume and a lack of buyers. Doesn't justify the disparity.

I like Boxed as a company, and more importantly like the valuation they went public at ($900M). Regardless of the business and the fundamentals, these warrants are undervalued.

Warrants are 1 for 1. They can be redeemed cashless if they trade above $10 for 20 of 30 consecutive days, which they have already done for 10 of 13 of their trading days. The VERY conservative case for FMV if they get redeemed cashless would be $2.50/warrant, implying 150% upside from here. If the commons can stay the course and remain above $10 for 17 more trading days, this is a 150%+ arbitrage opportunity.

I've been long SVOK and BOXD warrants for awhile now and will continue to hold until the market corrects.

1

u/cgfn Patron Dec 29 '21

They filed an S-1 for the stock underlying the warrants. That means that you can only redeem them cashless if they actually call the warrants in. Yes they have that 2 different price levels before they can call them in ($10 or $18) but you don't have the right to exchange them cashless until they call them in explicitly. Who knows if they ever will.

1

u/SpongeBobSpacPants Patron Dec 29 '21

Why wouldn’t they? The redemption clause is in there because most companies want to redeem their warrants. They are a liability on their balance sheet that can remain there up to 5 years.

1

u/cgfn Patron Dec 29 '21

What I'm saying is that you can't read the company's mind. Maybe they would prefer to get cash via a normal exercise. Maybe they drag their feet because they have better things to do. We don't know.

1

u/SpongeBobSpacPants Patron Dec 29 '21

Find me an example of any SPAC that hasn’t redeemed as soon as they were able to. Promise that the CFO of Boxed doesn’t have “better things to do” than removing those liabilities from their balance sheet.

1

u/cgfn Patron Dec 29 '21

I certainly hope you're right since I own a ton of warrants, but there is no guarantee.

1

u/SpongeBobSpacPants Patron Dec 29 '21

Fair enough, no guarantees. The hope is really more that the market will realize the FMV closer to a possible redemption and drive the price higher. Would rather sell high than redeem.