"If you get that with SPAC's too, I'm super-excited. First, you get the above-mentioned first day returns;
second, they often seem to appreciate in price soon after being issued (whereas IPOs often go down
dramatically the following weeks) following a merger rumor and consequent statement....."
To my knowledge, the market still isn't giving anything away. Take a look at ATNF, merged with KBLM:
MENLO PARK, Calif., Nov. 10, 2020 (GLOBE NEWSWIRE) -- 180 Life Sciences Corp. (NASDAQ: ATNF or
the "Company"), a clinical-stage biotechnology company with its lead indication in Phase 2b/3, focused on
the development of novel drugs that fulfill unmet needs in inflammatory diseases, fibrosis and pain, today
announced the successful closing of its transaction with KBL Merger Corp IV.
Before the final merger announcement ATNF was over $10, today $2.37.
I never followed it, but I suppose the first announcement was the end of June, when the Spac warrants,
KBLMW, traded from 11 cents to 48 cents in two days. ( you can find these on Barchart even after the symbol change. )
That is far from the only one. It is like short sellers. You hear about the home runs, but nobody talks about all the times they strike out.
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Something to think about with these. 100 shares of KBLM would have cost $1000+ and would now be $237.
Buying 1000 shares of the KBLM warrants, bought at the high would have been $480. Losing 100% on the
warrants would have been cheaper than holding the stock at this point. Warrants are .19 today.
On the other hand, look at LAZR. On Nov. 12th you could have bought 100 shares for $1020, or 400
warrants for $940. At close today the stock would be worth $4,180 with the warrants at $6,280.
I'm far from an expert, so jmho, you either buy a pig in a poke before there is any announcement what so
ever, or you wait for the time between the first announcement and the actual merger. I won't spend $10 a
share for that pig, but I've spent .35 to $1.
I never followed LAZR, but I'd bet that bump in September was the first announcement. Not seeing any
bump on the ATNF chart.
Realize that the exercise prices on the warrants is "generally" $11.50, so they have no real value until the
stock reaches that price. |
