There Are Tons of Ways to Win in the SPACmarket, you can Beat Them With the Basics, Blind Side them With the Trick Plays, Or Do a Combination of Both.
Real Life Unit Example:
IPOB.U – 1 Common and 1/3 Warrants
Purchase Price – June 12th 2020:
Current Price – July 19th 2020:
18.53% Increase In 35 Days
If you bought $1000 worth of it at the beginning thats a profit of:
A total worth of share’s1,185.3$
If you Split the Units to Get Warrants and Common Shares you would receive:
1000$ \ 11.01$ (Unit Price)
90.82Units – Lets Round to 91 Units bought
91 Commons which are now worth 12$
91 Common Shares * 12$
91Units * .33$ or 1/3Warrants
*3.84$ Warrant current price
1092$ + 115.2$
At this point you can either:
Hold for future flip
and happy with your Green and move onto the next one.
Sell Commons Keep Warrants:
keep in mind you only have 30 Warrants and even if the price goes 2x you still only have 230.4$ In Warrants. Cool thing is this is all pure profit play, aka “free money,” which is riding. If the target LOI end up being something big this could get better and better.
So Including in this method after your warrants have 2xed you would add back your profit from the commons of 92$ and that would give you a 322.4 Gain or 32.24% Increase on your money.
Ya But What If You Bought the Units Within A Couple Days Of Being Released?
1000$purse / 10.2$Buy
27.89% or 278.9$ Gain in around 80 Days
This example is not Normal, Why not Use a realistic SPAC to do this with.
Keep in mind this example is a Unicorn SPAC.. or one that is overly parabolic because of the management/size of purse behind it. I wanted to give a bigger/best green example I could find.
Most warrants once released are going to start around $1, could be .50$ could be 2.25$. But getting to 3.84$ with no potential LOI is crazy.
And most Units lets just say will stay around 10.50$
1000$/10.5$ (average unit early buy price)
With Warrants at a $1 *30 shares = 30$
Commons at 10.5*95shares = 1000$
1030$ or 3%
All these numbers move around a lot but generally this is what you will most likely see for quite some time. Many look at buying Units at the beginning so they can split and just sell the commons right away and move them to the next one, and then just let the warrants ride ( for free. ) Which is a solid safer strategy. But even if the warrants 4x Multipliers which is great you are still only holding 120$.
Keep in Mind this was based off of 1/3 warrant some Units come with 1/4 or ½ like FUSE.U which I bought on Friday Which totally changes the game too.
But what if you put in 10,000$…. and the warrants went 4x Multipliers?
10×24(riding free warrants) = 240$ x 4x Multipliers = 960$
But what if you just waited for the Warrants to come out and bought on opening day instead of messing with the Units?
1000$ Cash to Invest / 3.5$ Per Warrant
285.71 Warrants you could have bought at opening day – Lets round that to 286 ( even though your broker will NOT do that. )
x3.84$ ( Current Price )
1,098.24$ Current worth in 27days thats a
But if Warrants 2x
You will have 2000$ total – 1,000$ in Profit or a 100% Increase on your money ( risky this could end up at $0 if no deal is made.)
Chart on SOAC, DMYT, less than 1 month 2xed – NOT common but it does happen, more risk with straight warrants but WAY more money to be made.
Buying NPA w, PIC w,
Maybe PSTH, TRNE tomorrow