SPAC Warrants – Hennessy Capital Acquisition Corp. IV (HCAC, HCACW)

Hennessy Capital Acquisition Corp. IV is one of over 100 SPAC’s currently trading and in our stock warrants database. The shares trade on the Nasdaq under the symbol, HCAC, and the warrants as HCACW. They have seen explosive activity and growth over the last few months and at the time of this writing are continuing their parabolic upward trend with an above-average volume and liquidity.

Hennessy Capital Acquisition Corp. IV went public via an Initial Public Offering, (IPO) for $261 million on February 22, 2019, with the intention of completing a merger within 18 months. “…If we are unable to complete our initial business combination within 18 months from the closing of this offering, we will redeem 100% of the public shares for cash, subject to applicable law and certain conditions as further described herein….”

One of the magic ingredients or ‘secret sauce’ of investing in the SPAC’s is to identify the promoters, sponsors, and management team as to their intended merger partner. This information is made available in the original prospectus of each company and can serve to lead investors to isolate or discover the investment sector in which the company is pursuing a merger. Sometimes the intent is provided and the industry classification is similar to that of an already operating company, however, most times identifying a business sector is vague. In a wide variety of cases, the company disclosure leaves the entity undeclared to broadly explore potential M&A in all industries and investment sectors that best utilize the skills of the management team of the SPAC.

A Special Purpose Acquisition Company (SPAC) is defined as a company with no commercial operations that is formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company. Also known as “blank check companies,”

 Investopedia

Since the end of summer 2020, the warrants have remained close to, if not at, the top of our leader-board and in the Top 5 Most Active warrants (available on the home page of Common Stock Warrants to non-subscribers), and continues to trade well over 1,000,000 warrants a day. As with the warrants in this sector that have preceded it, we are reminded of the Nikola Motors story that shares the business combination with a SPAC and has continued to grow at a rapid pace. Investors should realize that the stock warrants in these companies provide exponentially higher upside leverage than the common shares and are thus, a major attraction for traders as well as long term investors.

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Dudley Baker does not own any shares or stock warrants in HCAC or HCACW 

Disclaimer: Dudley Pierce Baker is not a registered financial analyst and his opinions are his alone. Interested ...

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