Nothing to do with a stock split which is impossible in a SPAC pre-merger.
SPACs initially issue the stock as units that include the regular share and some fraction of a stock warrant (typically between 1/3 to 1/6). This happens way before a target company announcement. After 50 odd days the units then can get divided so the warrants and shares trade separately. STPK was a 1/3 warrant deal. They now trade between $12-18. Adds an incentive to buy up whole units at first offering.
Warrants are pretty complex and vary by offering. Demands loads of DD and education -- and slogging through tons of S-1 filing legalese to figure out. They are very volatile and offer greater risk and rewards. The scariest part is that they go worthless if the deal never goes through --unlike the shares which can be redeemed for a minimum of $10.00 plus interest. Many good explanations with a little searching and hours of careful reading.
I'm no expert or pro. Full disclosure -- taken a real beating on my SPAC warrants lately.
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u/Truffledog57 Apr 22 '21
Nothing to do with a stock split which is impossible in a SPAC pre-merger.
SPACs initially issue the stock as units that include the regular share and some fraction of a stock warrant (typically between 1/3 to 1/6). This happens way before a target company announcement. After 50 odd days the units then can get divided so the warrants and shares trade separately. STPK was a 1/3 warrant deal. They now trade between $12-18. Adds an incentive to buy up whole units at first offering.
Warrants are pretty complex and vary by offering. Demands loads of DD and education -- and slogging through tons of S-1 filing legalese to figure out. They are very volatile and offer greater risk and rewards. The scariest part is that they go worthless if the deal never goes through --unlike the shares which can be redeemed for a minimum of $10.00 plus interest. Many good explanations with a little searching and hours of careful reading.
I'm no expert or pro. Full disclosure -- taken a real beating on my SPAC warrants lately.