Ernie, question for you. Have you seen many instances where after a SPAC merger the warrants were NOT immediately exercisable?
I have not seen many instances, but I've also never really looked that closely. PHUN and ORGO were the only two I can recall where the warrants couldn't be immediately exercised.
The reason I bring it up, is because I'm wondering if the delayed exercise might actually be a sign that the investment banks, market makers, etc are going to run the stock. I can't think of any good reason why warrants shouldn't be immediately exercisable, can you?
The nefarious reason, however, would be you have a company with a tight float, want to be able to do some wash trades back and forth to run the price, and want to make it difficult for anyone to stop the price rise quickly. If the warrants were immediately exercisable, you could buy the warrant, exercise, and then sell the stock. (Or buy the warrant and immediately short the stock). But when the warrants can't be immediately exercised, you essentially have to naked short a low-float stock that is running like crazy, which is incredibly risky.
What do you think? Is delayed exercise of the warrants maybe something to look for in future SPAC mergers as an indicator to buy the stock?
