There’s actually not a lot of skew on this, and it’s the implied borrow that makes the put premiums higher, nothing else.
The IVs by definition have to be the same on both the put and the call (any deviation you see is usually from variances in the bid-ask spread). There’s a pretty substantial borrow rate for DWAC that is reflected in the options.
There might be merit behind the SEC’s subpoena of DWAC - Trump and co left the board a few weeks prior.
Former President Donald Trump left the board of his social media company just weeks before it was issued subpoenas by the Securities and Exchange Commission and a federal grand jury in Manhattan, records show.
Trump, who had served as the chair of Trump Media and Technology Group, was one of six board members removed, according to a June 8 filing with the Florida Department of State’s Division of Corporations. His son Donald Trump Jr. also departed the board, along with Wes Moss, Kashyap Patel, Andrew Northwall and Scott Glabe.
…
The SEC served the company with a subpoena on June 27. Three days later, a federal grand jury in Manhattan issued a subpoena to the firm. Grand jury subpoenas typically indicate a criminal investigation is in progress.
There isn’t that much meat on the bones left to pick here compared to a few months ago, but this could still fall another 50% to NAV.
DWAC up ~32% Friday AH on news of Musk pulling out ( 
). Potential Puts play on the horizon perhaps
Looks like this is going to $10 tomorrow
https://twitter.com/unusual_whales/status/1566990907848761345
Liquidation for sure:
Actually looks like it’s not 100% over but it’s getting close.
The SPAC has built-in extensions of up to six months that can be initiated by sponsors adding money to the trust.
Also, the vote is happening today, Tuesday, and requires a minimum of 65% of shareholders to vote “Yes” to extend, according to the CNBC article.
The SPAC deadline is otherwise set for Thursday.
It is noted that retail holds a lot of the weight.
Therefore it is not 100% certain that the SPAC will liquidate but it’s a realistic possibility. And therefore as I’m typing, DWAC went as low as $18 at the premarket open and is actually now at $20. If liquidation was certain, this would trade at $10.
The PIPE deal expired on September 20, 2022. Patrick Orlando, the SPAC sponsor, is currently trying his best to secure a 10 day deal extension.
from: CNBC
The PIPE investors are hoping to bring down the minimum conversion price for their preferred stock from $10 to as low as $2, the FT reported, citing a person involved in the talks.
These are absolutely ridiculous terms and it looks like PIPE is bailing on the deal unless they get a deal of a lifetime. (Even the current terms were insanely generous). With a $10 minimum conversion price the max dilution is 100 million shares. That rises to 500 million shares if these new terms are accepted.
“Trump wants to make sure he doesn’t face a lot of dilution,” one person involved told the FT. “Optically, he wants to avoid a $2 floor. It looks weak and he doesn’t want to look weak.”
This looks really bad for DWAC’s prospects. Every single problem with the merger has been due to the incompetent sponsor (negotiating before SPAC IPO, insider trading etc). The DWAC team has fucked up every step of the way and this new development is a particularly big fuck-up in a long series of fuck-ups by the sponsor.
Next Sunday voting is closed. With the news of investors pulling out, the mar a lago case, I have a feeling this is nearing the end of this spac.
Ok so as of right just now (3:43 pm EST on 10/4/2022) DWAC is trading around $17.15. Latest news is sunday the vote will probably not pass. If thats the case then what date is it supposed to be liquidated? Does it still have a NAV of 10 or around there? Obviously my mind jumps to puts that are greater than the 10 strike since it wouldn’t go below. What am I missing? Sure it could be propped up by retail but i’m super hesitant because it seems to easy. If the vote doesn’t pass would any of my puts be worthless cause they just pay out the shares? Would I have to exercise, then sell? I feel like an idiot asking this stuff but if its too good to be true…Surely there is something I am missing besides them voting to extend. Even with IV => 100% which it has been today options seem cheap. This isn’t some nonsense chinese spac that no ones heard of (S/O to my boy ESSC 
) Why hasn’t “the market” tanked this thing yet with sunday potentially being it?
Difficult to see how Twitter acquisition going through is not bad news for DWAC.
Hence took 10/7 14P/16P bearish put spread for 0.34.
I was gone most of the day, including for TWTR news, but I viewed Elon’s original pursuit of twitter as bearish for DWAC the first time around, and so did the market, I’m gonna try a few puts as well tomorrow, but I’ll probably grab some for the 14th instead, I believe the vote is this weekend from the posts above. I don’t believe I’ll hold them through the vote unless I can cover original Cost basis first.
Vote extended to November 3rd once again, sounds like they didnt get enough shareholder votes and are trying anything they can to attempt to get this passed through. I will be selling my November 18th puts and collecting into the December expiration now just for some safety (im still very green on my november puts anyway). Still eyeing the 12.5p on this and will be back in it over the next 2 or 3 weeks before the next vote.
Why the $DWAC 10p options are not a deal failure play:
If the sponsor fails to get enough votes and decides to call it quits the SPAC will in all likelihood liquidate. The NAV is at least ~$10.31 (might be higher if they had to add money to the trust a second time) and in case of liquidation the price will come up very close to NAV (due to arbitrage).
There is really only one unlikely scenario where your puts will be worth anything:
#1: The deal gets finished before the expiry of your puts and merger date is set before your puts expire. This will be a multi-bagger but it’s very unlikely to happen.
There is a chance that the deal gets called off and the sponsor doesn’t liquidate. In this case the SPAC would probably still not break under $10 due to the already high NAV and arbitrage funds buying up the float to redeem at next redemption date.
Opening the following as a lotto - $12.5p 12.16.22 @ $.68ea
Binary play on I think the deal falls apart.
A few reasons why I’m willing to take this postion.
The original shareholder merger vote was delayed because of an Ongoing SEC investigation, that as far as I can tell is still ongoing. The investigation was disclosed in a filing back in December of 2021.
DWAC filed for Extension back in August for an extension to complete the business merger.
https://www.investors.com/news/dwac-stock-falls-ahead-of-trump-deadline-vote-on-monday/
Since there was no Vote ARC Global (DWAC’s sponsor) contributed another $2.9m~ to extend the. merger deadline until December 8th with the funding.
Next vote for extension is November 3rd.
Trumps gonna be allowed back on Twitter with Musk’s purchase. He had some 88 million followers or so at the time he was banned. His current reach on DWAC’s platform is about 4.5 million followers, this is after the android launch. I would consider this essentially full Truth Social launch at this point, domestically at least, and he has 1/20th the reach as he would if he was back on Twitter. I can’t imagine he doesn’t return to the platform in some way, even if not, he has suggested in the past he could kill the DWAC merger.
April 28th, 2022.
TLDR; binary lotto for a deal I dont believe is going through. With November 3rd, December 8th, and End of 2022 as notable dates.
– I would rather DWAC get a move up, potentially a squeeze on no news, for even better put entries, this would allow a play down for actually trading, instead of just a binary play like I’m taking. as we get closer to EoY, I may take weeklies that expire just past the beginning of 2023.
nice idea. I’ve added the 11/18 15p to my watchlist. Might take 1 or 2 at around 1.00 each.
I have a limit buy order in for one 11/18 15p at 1.00
Nvm cancelling the put order for now https://twitter.com/zerohedge/status/1586034995944103937?s=46&t=kpPPZeJSuBrfeMCBkXySiw
