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REDDIT

How do stock warrants work?

4
Feb 23, 2026 · 06:34

If a tranche of short term stock warrants with 24 months to exercise, and $8 value are sold, then the stock falls below $1, and a 1:20 reverse split is exercised, so the stock value is now $20, can the warrants still be exercised for $8 and immediately sold for a $12 profit on the open market? Or are stock warrants also "scaled" by the reverse split?