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It's a great question. I have been trying to figure this out for over a week. One of the problems is that the provision is *horribly* drafted. Exactly what you're subtracting from what and why isn't 100% clear. What I came up with is that either the warrants should be worth either around 30c or zero. I shorted a few thousand TLMDW, but covered in a few days at nominal profits because I realized I shouldn't play it without actually knowing for sure how the provision worked.
A question for the group about TLMDW price. TLMDW has been trading very consistently around 70 to 75 cents ever since the proposed buyout by Patient Square Capital. The [agreement](https://www.sec.gov/Archives/edgar/data/1791091/000121390022005359/ea154900ex2-1_soctelemed.htm) says: The Warrant Price ( exercise price ) becomes $11.50 minus $3 minusany Warrant shall, in accordance with its terms, automatically and without any required action on the part of the holder thereof, cease to represent **a Company Warrant in respect of Company Common Stock and shall become a Company Warrant exercisable for Merger Consideration.** **If a holder properly exercises a Company Warrant within thirty (30) days following the public disclosure of the consummation of the Merger pursuant to a current report on Form 8-K, the Warrant Price, as defined in the Warrant Agreement, with respect to such exercise shall be reduced by an amount (in dollars and in no event less than zero) equal to the difference of (a) the Warrant Price in effect prior to such reduction minus (b) (i) Merger Consideration minus (ii) the Black-Scholes Warrant Value** (as defined in the Warrant Agreement)." The [Warrant Agreement](https://www.sec.gov/Archives/edgar/data/0001791091/000121390019025277/fs12019a1ex4-4_healthcare.htm) specifies: "The “Black-Scholes Warrant Value” means the value of a Warrant **immediately prior to the consummation** of the applicable event based on the Black-Scholes Warrant Model for a Capped American Call on Bloomberg Financial Markets (“Bloomberg”)." Merger Consideration is the $3 per share cash offer. The Warrant Price ( exercise price ) becomes $11.50 minus $3 minus the Black-Scholes Warrant Value. The warrants are trading as if the exercise price will be $1.50 to $2, if assuming some uncertainty that the deal goes through. If assuming the deal is certain, the warrants are trading as if the exercise price will be $2.25 or so. Is the Black Scholes Warrant Value really $6.25 ? I tried some online calculators, cannot come up with that figure, but don't have access to the Bloomberg calculator. Or is there some other reason the warrants have been trading in this range?