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Andina Warrants - Overpriced.

|Includes: DSKE, Lazydays Holdings, Inc. (LAZY)
Summary

Andina is a spac which should complete a merger March 15.

Andina warrants (Andaw) are priced as if buyers have the wrong terms. Should be half the current price.

Andina Acquisition Corp (ANDA) is a special acquisition company or spac.

They have announced a deal and have issued the proxy. They have financing lined up which makes completion of the deal very likely. 

I am not analyzing the merits of the merger, or predicting the performance of the post merger Andina/LazyDays. However, the pipe deal which essentially backstops the deal is priced below trust, and the stock is currently trading below trust value. Trust is $10.30.  In addition, rights are trading at a price equivalent to about $9. This is not unusual; rights usually trade at a discount. But, it's clear that buyers aren't loving this deal. If they were, the stock and rights would be higher than trust value. This doesn't mean that the stock can't or won't go higher post merger;spacs do crazy things sometimes, but my opinion is that the stock will be around $9 or so. Again, that's just my opinion.

On to the warrants.

The terms of Andina warrants (NASDAQ:ANDAW) are 2 warrants plus 11.50 buy one common. They have five years from deal closing to expiration. They traded as high as 2.26 today. Remember you need two, so someone paid $4.52 for the right to buy 1 share at 11.50. I'm not getting into black scholes. This is obviously a ridiculous price.

For example, if anda trades at 16, andaw will intrinsically be worth 2.25 plus a small premium.

I can only guess that that someone has the wrong terms and thinks that one warrant buys one common, in which case the price would be about right.

Compare Andina to Daseke (DSKEW), which have the same terms.  Daseke common trades at about $10.10 and DSKEW trades at about 1.10 or half the price of ANDAW.

It's also possible that someone expects or knows that Andina will do a warrant buyback. That's done sometimes, but this would be a stupid price to pay, and buyers would be trading with inside information. 

Bottom line - no one will read this and no one cares, but this price is ridiculous.