VLDR - RedBall Acquisition: Call Options Could Outperform Warrants

• Valuation of deal searching SPACs had trended higher and higher over the past two months, making it increasingly difficult to identify decent trades with favorable risk and reward profile.
• Current market selloff started to present long waited buying opportunities for solid SPACs such as RedBall Acquisition Corp.
• Unlike most of the deal searching SPACs, RedBall’s common shares have actively traded equity options. Its call options could potentially outperform the warrants.
• The key risk of owning the call options is that they would expire worthless if the company does not complete a business combination by call option expiration date which is earlier than the SPAC liquidation deadline.

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