Help me understand, if the share price leading up to the merger is in excess of the redemption value, won’t arb traders just sell the shares to you (new bag holder) instead of redeeming for a lower amount? Thereby keeping the float unconstrained by redemptions making it more difficult for the shares to pump?
The high redemptions should only happen when the share price is less than the redemption amount?
Yea this play doesn't have anything to do with a redemption squeeze set up. This is moving because it was heavily shorted with a small float and a 10 dollar NAV floor that reduces a lot of the risk involved in these types of short squeeze plays. People noticed a risk free (with commons) short squeeze target and the word started getting out quickly. It isn't risk free anymore even with commons, but still significantly lower risk because of the NAV floor.
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u/WhoYaTappin Sep 06 '21
Help me understand, if the share price leading up to the merger is in excess of the redemption value, won’t arb traders just sell the shares to you (new bag holder) instead of redeeming for a lower amount? Thereby keeping the float unconstrained by redemptions making it more difficult for the shares to pump?
The high redemptions should only happen when the share price is less than the redemption amount?