RDBX - Why Redbox Stock Dropped Today
Shares of Redbox Entertainment (NASDAQ: RDBX) dropped on Friday, down 14% as of 3:30 p.m. ET. The stock has been whipped up and down over the past few months as traders attempt to predict the future of the company and its stock.
Redbox went public in October at $10 per share via a special purpose acquisition company (SPAC). By February, shares had already plummeted nearly 90%. After a couple more months in the doldrums, Chicken Soup for the Soul Entertainment (NASDAQ: CSSE) emerged as an acquirer on May 11. That appeared to be the end of the story. But it wasn't.
The merger agreement states that every Redbox share will be exchanged for 0.087 shares of Chicken Soup for the Soul. As of this writing, Chicken Soup for the Soul trades at $9.50, implying Redbox stock is only worth $0.83 per share, compared to the $4.43 per share it trades at right now. Therefore, isn't it obvious to short Redbox, expecting it to go down?
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Why Redbox Stock Dropped Today