This could explain a lot of the selling over the p

This could explain a lot of the selling over the past few weeks.


As of February 28, 2025, CytoDyn Inc. had approximately 224 million warrants outstanding, with a weighted average exercise price of $0.25 per share and an average remaining term of 3.87 years.


These warrants were issued through various private placements and financing arrangements over recent years. For instance, in a warrant tender offer that concluded in July 2024, about 127 million warrants were exercised, generating approximately $11.9 million in gross proceeds for the company.
CytoDyn Inc.
CytoDyn Inc.

The exercise prices of these warrants vary, ranging from $0.09387 to $1.00 per share, depending on the specific issuance terms. Some warrants, particularly those issued to placement agents, include cashless exercise provisions.

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.