The Role Of Warrants In Shelf Offerings
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.
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- 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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