We’re up 160% on our Excelsior portfolio’s Navitas Semiconductor warrants (NVTS.WS) today. At a recent price of 6.70, the warrants are trading for more than their maximum fair value and we recommend selling most of the position today.
Navitas’ warrants are exercisable at 11.50 and have a redemption clause for the company to redeem at 18. That puts our theoretical ceiling price for the warrants at 6.50. It’s not unheard of to see SPAC warrants trade above their ceiling price, which is why we’re recommending holding a small portion of the position to capture any additional upside. For the portfolio purposes, we consider selling “most” to be 75% of the position.
When we entered Navitas in June, the price hitting 6.50 was our best-case scenario. Exiting around the recent price of 6.70 will give us a profit of $4.13 per warrant, or about 160% on what’s sold. It also locks in an 89% gain for the whole position even if the remainder becomes worthless.
Our next issue of SX Greentech Advisor is out tomorrow, Wednesday, November 17. Feel free to let me know if you have any questions or comments. You can reach me at brendan@cabot.net.