Recently de-SPACed Lucid Group said it will redeem all of its outstanding public warrants on a cashless basis with an Oct. 8 deadline. The move was expected.
CEO Peter Rawlinson said the company is requiring the cashless exercise so warrant holders, including retail investors, will be able to own shares without cash. He said the action is also expected to minimize dilution.
The electric vehicle startup debuted on the stock market last month by merging with Churchill Capital IV. The SPAC raised money in a 2020 public offering and sweetened the deal by giving investors warrants exercisable at $11.50 each for a share. The warrants were initially offered with a five-year expiration. The SPAC’s sponsor warrants were good for 18 months.
Rather than pay the standard $11.50 to redeem a warrant for a share, terms of the redemption call for warrant holders who want to redeem to surrender 55.42% of a share per warrant. In exchange, they would receive 44.58% of a Class A share. After Oct. 8 the warrants will cease trading and become void. Read more.