written by reader What to do when SPACs (e.g . GRAF and SHLL) offer cash redemptions prior to their IPO’s?

By bunion132, September 24, 2020

Earlier this week, GRAF (the SPAC for Velodyne Lidar) and SHLL (the SPAC for Hyllion) both offered cash redemptions in lieu of holding shares for the companies they plan to merge with. GRAF offered only $10.24/share, or about half of the current price. SHLL did even worse, offering $10.16/share, or roughly one-fourth of the current price.
My brokerage house either could not or is not allowed to advise on what action to take regarding the huge reduction in share price and could only accept my refusal to participate in the redemption. So I’m hoping Gumshoers are willing to share their (truthful) opinions on what they think is really happening with these SPACs or have answers to the following questions:
1) Why would GRAF & SHLL dumb-down the price that low?
2) Is this an indication that their merger agreements are not proceeding well prior to their IPO’s?
3) Both stocks continue to decline. Is it better to cut the losses now or wait for the IPO’s (if they happen)?

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

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