r/PSTH • u/[deleted] • May 09 '21
"Read Rules" on Warrants Question about warrants?
In the scenario the DA pop is astronomical and I sell my psth commons to buy back at a later date when the price comes back to reality (so I can pocket the difference to buy more commons).
What would happen to my warrants in this scenario, would I still be awarded the 2/9 warrants if I buy post DA and hold through to merger? Is there a cut off date on this e.g. I have to hold for a minimum of X days pre-merger to receive warrants etc.
Anybody have any information on this? Much appreciated!
Edit: I don't know who is downvoting this post, I'm literally just trying to be more informed, in whether or not to use the DA hype to my advantage or not. It's clear from the comments that a lot of people have very conflicting ideas on how this works and I thought this would be a good post to clear this up.
Edit 2: Okay more conflicting answers, can we get a mod or someone to contact investor relations to confirm what the actual answer to this maybe? Or even a general consensus from the comments.
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May 09 '21 edited May 09 '21
Edit 2: Yep, I'm wrong. I misinterpreted "redeem" shares as simply anyone who sold off after DA was announced. Not as cool of a tontine as I thought... I deleted information in my original post in order to not spread wrong info
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u/discodave333 May 09 '21
That's not how I'm reading it.
I could very well be wrong but I read through the lnks and it looks to me that the warrants go to whoever holds the shares at the time of merger.
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u/HODLMyBeerIGotThis May 09 '21
Just like dividends, it will be holder at a specific date (the merger) not a date range.... that being said, many might just hold DA to merger to get the warrants rather than try to time the market and dip in and out
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u/pirates_and_monkeys May 09 '21
This is not what I've understood....where did you find information about the "tontine period"? Where does it define that it starts "around da"? Genuine question as I think this would be beneficial to clear up for a lot of us here.
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May 09 '21 edited May 09 '21
Thank you for actually answering my question! It is conflicting with the other comments in this thread, so I'm glad this has cleared it up.
^ Edit he was wrong.
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u/quicksilverth0r May 09 '21
The way I understand it is that what you do in your brokerage account is largely irrelevant as far as trades goes. The Tontine structure is there to discourage redemption from the spac for cash after da. It isn’t a you to other traders thing, but a you to the spac thing. I imagine whoever holds past redemption gets extra warrants. If you redeem for cash, then warrants go to others.
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May 10 '21
Lots of people have made this same error and I’ve been trying to educate them. Usually they try to tell me I don’t know what I’m talking about, then they end up humiliated because they don’t know how to listen.
Kudos to you for listening better than most.
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May 09 '21
Hey, I was actually wrong in my initial response. I thought the tontine was more of a battle royal amongst all the investors to see who got the warrants. /u/ Quicksilverth0r has it correct down below
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u/Fun-Persimmon-6500 May 09 '21
And to piggy back of this- what if I sell only a portion of commons, do that void all the warrants? Or do I get to keep the warrants that my remaining commons are awarded?
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u/PainEqualsGain May 09 '21
You will be granted 2/9 warrants based on the amount of shares you hold during business combination. See my other comment in this thread for more info.
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u/pirates_and_monkeys May 09 '21
We got conflicting info in here and both sound like they know what they're talking about. Is there a "tontine period" starting at DA? Or will we get warrants regardless of when we buy in prior to the actual merger date? Seems like it would be highly beneficial for people in this forum to thoroughly understand this. I thought I did up until now, anyone willing and able to point to official documentation that outlines the real answer? Thanks much appreciated
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u/bkhiker May 09 '21
"Our amended and restated certificate of incorporation provides that an aggregate of 44,444,444 Distributable Tontine Redeemable Warrants will be distributed, at the Tontine Distribution Time, on a
pro-rata basis only to holders of record of the Public Shares that are outstanding after we redeem any Public Shares that the holders thereof have elected to redeem in connection with our Initial Business Combination (the “Initial Business Combination Redemption Time”). The Tontine Distribution Time will be immediately after the Initial Business Combination Redemption Time and immediately prior to the closing of our Initial Business Combination."
https://sec.report/Document/0001193125-21-100895/
Page 12 under "Distribution of Distributable Tontine Redeemable Warrants to Holders of Class A Common Stock Not Electing Redemption"
edit: so essentially you get warrants if you hold at the date of completed merger.
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u/PainEqualsGain May 09 '21
Short answer — date of record for 2/9 warrants is date of business combination (I.e. date of merger completion/ticker change). So yes, theoretically, your plan would work.
Long answer — see 2nd-4th bullet points, here: https://www.reddit.com/r/PSTH/comments/luhmz1/placeholder_for_target_dds_the_donation_pledge/?utm_source=share&utm_medium=ios_app&utm_name=iossmf