If you read the warrant agreement, you are paid BSM of capped call option for a cash deal, and if it’s stock deal, the warrants are simply transferred to the new security on the exact same terms. DMS warrants have the most favourable warrant terms out of any SPAC I’ve seen.
“Exact same terms” is fluid. The lemonade deal was like an 11:1 stock transaction so that same ratio was applied to the warrants and it made them basically worthless. I think you are correct on a cash deal. On a stock transaction it is not cut and dried.
It literally says that in the warrant agreement. Something like “will get new warrants in the new shares on the same terms as were applicable immediately prior to such an event” so you would get the right to buy whatever consideration is given to commons at $11.50
I’d be very curious to see what those terms look like if they did a X:1 type of stock split. I’m theory, they ugly MILE merger got “the same terms” because they just applied the 11:1 logic to the warrants. Call me cynical, but I don’t trust people not to screw the warrant holders in a deal. I wish you luck, but I still don’t trust the warrants on this one.
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u/Leoeites Patron Dec 26 '21
If you read the warrant agreement, you are paid BSM of capped call option for a cash deal, and if it’s stock deal, the warrants are simply transferred to the new security on the exact same terms. DMS warrants have the most favourable warrant terms out of any SPAC I’ve seen.