I’ve always known markets could get crazy. Tail risks / black swan events are out there, and unexpected things can happen to markets / companies all the time. But, if I look back over the past ~18 months, the #1 lesson I’ve learned is that markets can get much, much crazier than you can dream of. I never imagined a downside scenario like COVID (basically causing the economy to halt for several months, with all in-person / live activities out of the question for over a year). And I never imagined an upside scenario like the current meme-stock craze. Yes, I was aware manias and short squeezes could happen. But those are generally short lived things. AMC, GME, and the rest of the memes have now sustained elevated share prices for almost half a year. That’s not how these type of squeezes are supposed to work; they’re supposed to be quick pops followed by a quick drop back to reality.
Any concern that, instead of the company raising cash, they just let the insiders sell after the July 5th unlock, and you end up getting dumped on?
Pursuant to the Amended and Restated Registration Rights Agreement dated as of January 7, 2021 by and among SCH, Clover Health, the Sponsor, certain former stockholders of Clover and other parties thereto (the “Registration Rights Agreement”) and our amended and restated bylaws, subject to certain exceptions, the Sponsor and the former stockholders of Clover, including our directors, executive officers, principal stockholders and their affiliates, are contractually restricted from selling or transferring any shares of common stock (not including the shares of Clover Health Class A common stock issued in the PIPE Investment pursuant to the terms of the Subscription Agreements) (the “Lock-up Shares”). Such restrictions began at the closing of the Business Combination and will end on the earlier of (i) July 5, 2021 and (ii)(a) for 33.33% of the Lock-up Shares, the date on which the last reported sale price of our Class A common stock equals or exceeds $12.50 per share for any 20 trading days within any 30-trading day period commencing at least 31 days after the closing and (b) for an additional 50% of the Lock-up Shares, the date on which the last reported sale price of Class A common stock equals or exceeds $15.00 per share for any 20 trading days within any 30-trading day period commencing at least 31 days after the closing.
If the company called the warrants based on the FMV table do warrant holders have the option to exercise for cash or are they forced into cashless exercise?
I have been digging for options irregularities around in the SPAC rubble since April. There are some really crazy LEAP prices for recently de-SPACed companies. Some of it seems to be related to the fact that when they had crazy run-ups in Jan/Feb it created open options interest at very out of the money strikes (which had those runs never happened, those strikes wouldn't be traded).
HYLN Jan23 x80 call options are currently trading at ~$2 and the shares are $13.xx. I did a bunch of buy writes when the stock was ~$8.50 and that Jan 23 x80 LEAP was still trading at ~$1+. Basically bought the shares at a net ~$7.50 of which $2.80/share was represented as cash on their books (no debt). Gave me an acceptable entry based on enterprise value. this one has been a home run and I think the company has a lot of promise.
CCIV - stock trading at ~$26 today. Jan23 x95 calls @ $4.90. I have this position on as well but not as great with the entry ~$23.5 on shares Jan23 x95s sold at ~$3.40
Best part on these.....does not require margin.....delivers potential long-term capital gains for both the shares and sold calls.
Continuing to dig but with the SPAC bounce not finding quite as juicy opportunities right now.
Any concern that, instead of the company raising cash, they just let the insiders sell after the July 5th unlock, and you end up getting dumped on?
Pursuant to the Amended and Restated Registration Rights Agreement dated as of January 7, 2021 by and among SCH, Clover Health, the Sponsor, certain former stockholders of Clover and other parties thereto (the “Registration Rights Agreement”) and our amended and restated bylaws, subject to certain exceptions, the Sponsor and the former stockholders of Clover, including our directors, executive officers, principal stockholders and their affiliates, are contractually restricted from selling or transferring any shares of common stock (not including the shares of Clover Health Class A common stock issued in the PIPE Investment pursuant to the terms of the Subscription Agreements) (the “Lock-up Shares”). Such restrictions began at the closing of the Business Combination and will end on the earlier of (i) July 5, 2021 and (ii)(a) for 33.33% of the Lock-up Shares, the date on which the last reported sale price of our Class A common stock equals or exceeds $12.50 per share for any 20 trading days within any 30-trading day period commencing at least 31 days after the closing and (b) for an additional 50% of the Lock-up Shares, the date on which the last reported sale price of Class A common stock equals or exceeds $15.00 per share for any 20 trading days within any 30-trading day period commencing at least 31 days after the closing.
https://www.sec.gov/Archives/edgar/data/1801170/000119312521007853/d91397ds1.htm
If the company called the warrants based on the FMV table do warrant holders have the option to exercise for cash or are they forced into cashless exercise?
I have been digging for options irregularities around in the SPAC rubble since April. There are some really crazy LEAP prices for recently de-SPACed companies. Some of it seems to be related to the fact that when they had crazy run-ups in Jan/Feb it created open options interest at very out of the money strikes (which had those runs never happened, those strikes wouldn't be traded).
HYLN Jan23 x80 call options are currently trading at ~$2 and the shares are $13.xx. I did a bunch of buy writes when the stock was ~$8.50 and that Jan 23 x80 LEAP was still trading at ~$1+. Basically bought the shares at a net ~$7.50 of which $2.80/share was represented as cash on their books (no debt). Gave me an acceptable entry based on enterprise value. this one has been a home run and I think the company has a lot of promise.
CCIV - stock trading at ~$26 today. Jan23 x95 calls @ $4.90. I have this position on as well but not as great with the entry ~$23.5 on shares Jan23 x95s sold at ~$3.40
Best part on these.....does not require margin.....delivers potential long-term capital gains for both the shares and sold calls.
Continuing to dig but with the SPAC bounce not finding quite as juicy opportunities right now.