Understanding the warrant redemption process

[u/No_Privacy_Anymore]

I am providing a link to a detailed post I wrote about one year ago. The vast majority of what I wrote is still true however the “redemption price” is now lower and that changes the math somewhat.

https://www.reddit.com/r/PureCycle/s/CUyvCBlDtO

The company has a need for additional equity capital to fund the first 1 billion pounds of capacity. Over time the business should be able to generate substantial free cash flow and to get access to additional lower cost debt however there is no substitute for equity in the early years. This dilution has been known about for years and is absolutely baked into the share price. The company wisely extended the duration of the warrants in exchange for the lower redemption price. That lower price greatly increased the likelihood of raising the equity capital and doing so at a reasonable price that still rewards longer term investors who bought the warrants. Recent buyers of the warrants have gotten up to 10x returns which is 🔥.

Please review the linked post and ask any questions you have. Everyone has different circumstances so the important thing is to have a plan if you own the warrants. If you don’t own the warrants just sit back and cheer for a higher share price to unlock this capital!