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Posted On: 05/15/2025 7:35:56 PM
Post# of 154721
Please read this, as I know people who have done this!
However, some investors may choose to engage in a "cashless exercise" of their warrants. In this scenario, instead of paying cash to purchase the shares, the investor simultaneously exercises the warrant and sells the acquired shares in the open market. The proceeds from the sale are then used to cover the exercise price. This method allows investors to obtain the economic benefit of the warrant without needing to provide upfront capital.
In both cases, stock ends up being sold into the market, which can temporarily lower the price — this is why observers sometimes feel like cashless warrant exercises "act like short selling." But legally and structurally, they're not the same.
However, some investors may choose to engage in a "cashless exercise" of their warrants. In this scenario, instead of paying cash to purchase the shares, the investor simultaneously exercises the warrant and sells the acquired shares in the open market. The proceeds from the sale are then used to cover the exercise price. This method allows investors to obtain the economic benefit of the warrant without needing to provide upfront capital.
In both cases, stock ends up being sold into the market, which can temporarily lower the price — this is why observers sometimes feel like cashless warrant exercises "act like short selling." But legally and structurally, they're not the same.
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