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The Role Of Warrants In Shelf Offerings

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  • Milan Lakicevic
  • Milos Vulanovic

Abstract

Warrant is an important form of financial asset that enables entrance to primary capital markets to companies that otherwise would have difficulty to access it. We explain the nature of warrants and examine the reaction of warrants' value during two major events in the life of SPACs, namely the announcement of the merger and the merger itself. On average, warrant holders exhibit significant positive abnormal returns around these important events.

Suggested Citation

  • Milan Lakicevic & Milos Vulanovic, 2011. "The Role Of Warrants In Shelf Offerings," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 7(1), pages 73-78.
    • Handle: RePEc:mje:mjejnl:v:7:y:2011:i:1:p:73-78
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    References listed on IDEAS

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    1. Cowing, Cedric B., 1957. "Market Speculation in the Muckraker Era: The Popular Reaction," Business History Review, Cambridge University Press, vol. 31(4), pages 403-413, January.
    2. Brown, Stephen J. & Warner, Jerold B., 1985. "Using daily stock returns : The case of event studies," Journal of Financial Economics, Elsevier, vol. 14(1), pages 3-31, March.
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