Securities
Warrant
A right to buy a share at a fixed price, usually $11.50, exercisable only after a combination closes.
Also written: public warrant, redeemable warrant, spac warrant
Warrants are handed out with the units as a sweetener. They become exercisable 30 days after a combination and typically expire five years later.
Issuers can force redemption of the warrants once the share price sustains a threshold, commonly $18.00, which caps their upside.
If the SPAC liquidates, the warrants expire worthless. They have no claim on the trust.
Why it matters
Warrants are the leveraged expression of a deal closing. They are also deferred dilution that arrives in the combined company's share count.
Related terms
Unit
What a SPAC actually sells in its IPO: one share bundled with a fraction of a warrant, and sometimes a right.
Warrant coverage
How much of a warrant comes attached to each unit, a direct read on demand at pricing.
Dilution
The reduction in each share's claim on the combined company caused by founder shares, warrants and rights.
See the term in the wild: the screener shows trust size, per-share value and deadlines for every U.S. SPAC, and each profile links to the filings the numbers came from.
Definitions describe market practice and are not investment, legal or tax advice.