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I noticed that most (all?) SPAC warrants only become exercisable on the later of: (a) 12 months after the SPAC's IPO date, (b) 30 days after the de-SPAC transaction. I am surprised by this uniformity across many SPACs. What could be the reason(s) for the 30-day delay before the warrants can be exercised?

I have read this informative article — Special Purpose Acquisition Companies: An Introduction, which mentions the 30-days' delay but does not explain the reason for it.

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Warrant redemptions dilute the common shares, leading to a drop in price in most cases.

Here's an article that discusses dilution. I leave it to you to determine if it answers your question properly.

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  • I've read that article prior to asking this question (but I did not fully understand it). My question is: why not make the warrants exercisable on the day the merger is completed instead of waiting 30 days? Why delay?
    – Flux
    Dec 13, 2020 at 14:57
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    If indeed you are correct that most (all?) SPAC warrants have the exercise timetable that you laid out, then by reverse logic, they must want to delay the dilution that warrant exercise leads to since dilution is counter productive. I haven't been active in the IPO space since the years leading up to the internet bubble. At that time, many small cap IPOs issued units (common plus one or more warrants) and they kept the units intact for a period of time after the IPO in order to support price. It's not the same but perhaps it's the same reasoning process. Dec 13, 2020 at 16:49

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