Definition
Right to buy a share at a fixed price later – A security giving its holder the right, but not the obligation, to purchase one share at a preset exercise price, typically bundled into SPAC IPO units at a fraction of a warrant per unit, with additional warrants sold separately to the sponsor in a private placement. SPAC warrants only become exercisable well after the IPO, are usually redeemable by the company once the stock trades above a set threshold, and dilute existing shareholders if exercised. Found In: Balance Sheet (warrant liabilities), Notes to Financial Statements (equity/derivative disclosures)