Why and how to short IRNT and a playbook for the DeSpac Redemption plays
TLDR : IRNT warrant lock-up is expiring. Short IRNT directly and buy Calls to cover because they are insanely cheap.
Sup bag holders. I’m going to lay out a brief DD and hopefully your helmet is not on too tight and you can make some money.
Every single one of these DeSpac plays ends up being retail fighting retail over to see who is the biggest idiot. That’s not the type of DD I like to see on here. I like to see retail sticking it to the major institutions and the market makers. Sure one could argue that IRNT caused a gamma squeeze and many of you sold into the market makers who bought the shares. Excellent, that’s what we like to see, but there is another opportunity presenting itself to screw the institutions who provided retail with this epically shitty SPAC deal.
The lock-up period for IRNT warrants is about to expire. How do we know? They amended the S-1 filing and an EFFECT filing follows shortly after. The S-1 reads that the stock must be above $18 for 20 of 30 days. You can count it, and those warrants are going to be redeemable.
"We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption provided that on the date we give notice of redemption. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private warrants are redeemable by us so long as they are held by the sponsor or its permitted transferees."
How do I play it? The put option premiums are so pricey!
Look at the call premiums! They are hella cheap. I shorted the shares directly and I bought the October 15 28C for 1.25 this morning. There is significant options skew because nobody expects this to go up. If you have access to warrants you can also buy the warrants and short the stock in an arbitrage opportunity.
I will be tracking the S-1 amendment filings as well as tracking when these lock-up periods expire to try to front run the institutions in the future. I’ll be sure to give you guys a heads up in the future. This will work for every DeSpac redemption play that has popped. I sure hope the easy money continues.
via r/wallstreetbets https://ift.tt/3qhG8Zq
September 29, 2021 at 08:23AM