Warrant Watch List, 3/1

Markets gave back gains Friday after a weaker than expected ISM manufacturing index release. Data has been mixed recently, with weaker manufacturing data, but a nice bounce in consumer confidence numbers.

Trade talks with China have been on an apparent positive trajectory, with President Trump willing to extend the deadline for new tariffs, but housing numbers keep declining in report after report. 

Traders should get used to a mixed economic bag, and we could see some weakness in the overall market as the major indices bump up against resistance levels set late last year. Even more reason to focus on individual stock picks versus holding index funds.

Here are some warrants we’re watching now:

Phunware (PHUN, PHUNW)

The saga continues with Phunware, as the newly minted SPAC filed with the SEC that it would not be able to timely file its initial annual report .

The common stock of this mobile customer interactive platform provider, has fallen steadily since the company filed with the SEC to register the common stock underlying its warrants.

The warrants, exercisable at $11.50 a share, once the registration becomes effective, could easily double as long as the stock can levitate above $11.50 until the SEC declares the registration effective.

With the stock trading right at $28 we’re keeping a very close eye on this speculative play to sell long warrants into a quick pop.

Electrameccanica Vehicles Corp. (SOLO, SOLOW)

The common stock of this electric three wheel vehicle maker jumped over 450% recently when Alternet Systems (ALYI) announced the price for electric engines should be equivalent to that of combustion engines in a few short years.

SOLO and SOLOW ratcheted higher when Electrameccanica announced it would sell 5,000 single-seater electric vehicles in 2019, and 20,000 in 2020. The stock has pulled back, but is very likely to experience further volatility and price spikes.

The SOLO warrants, SOLOW, are exercisable at $4.25 and expire in July of 2023. The warrants actually traded at a discount to the common on the recent price action, but the common is not borrowable, making the warrant difficult to arb against the common. 

SOLO does have options, though very thinly traded, which could be shorted against the warrants in the right scenario.

Haymaker Acquisition Corp. (HYAC, HYACW)

Haymaker Acquisition Corp., a SPAC, announced the acquisition of OneSpaWorld November 1st. Judging by the jump in the price of the warrants, which could go to $0 if the business combination is not approved, investors like the combination and will approve it at a special shareholders meeting. 

The meeting is scheduled for March 6th, and the warrants, and common should see some volatility coming out of the meeting. We’re watching the warrants closely following on the heels of any announcement from the company out of the March 6th meeting. 

Subsequent to the announcement of the deal, OneSpaWorld announced an extension of a current contract with Norwegian Cruise Line (NCLH) which extends both the number of years OneSpaWorld is contracted to provide spa services on the ships, as well as the number of ships served.

While the warrants have continued to rise on this news, the common, expectedly given that the deal has not been approved yet, has traded flat.