- ISPO closed Friday at $42.48 and ISPOW closed at $3.60. The warrants have a strike price of $11.50. This means they are trading at $27.38 below their intrinsic value.
- Arbitrage can't yet be acted on until the warrants are exercisable, which is 30 days after the deal closed - March 15th.
- I expect the stock to decline heavily to less than $20 and the warrants increase slightly as the arbitrage gap quickly closes after this date.
- If you must have a position in ISPO, consider buying the warrants, not the stock.
- I have a small warrant position that I intend to sell once the arbitrage opportunity dissipates.
For further details see:
Inspirato: Warrant Price Suggests An Impending Collapse On The Stock