How will the market react to the dual‑class structure (Class A shares and warrants) and what is the expected demand for each component?

Market reaction to the dual‑class structure

The HVMC IPO is a classic “share‑plus‑warrant” offering: each $10 unit contains one Class A ordinary share and ½ of a redeemable warrant that can be exercised at $11.50 for a full share. When the components separate, the market will treat the two securities very differently. The Class A shares will trade on a “pure‑play” basis, reflecting the company’s fundamentals (cash‑flow, SPAC pipeline, near‑term de‑SPAC target). Because the shares are already priced at $10 and the warrant‑exercise price is $11.50, the equity side is likely to stay near the $10‑$10.5 range until the warrants’ expiry date (typically 18‑24 months) when the upside premium is priced in. Any upside beyond $11.50 will be captured by the warrant, so the share price will be anchored by the underlying valuation and will not be bid up by speculative demand.

Demand dynamics for the warrants

Warrants are essentially a leveraged bet on the same equity, and they will attract a distinct set of participants: speculators, option‑market makers, and investors seeking a cheap exposure to upside. Because each whole warrant gives the right to buy one share at $11.50, the intrinsic value is max(0, $HVMC – $11.50). With the share expected to open around $10, the warrant will be out‑of‑the‑money at issuance, but the market will price in the probability of a future re‑rating, SPAC de‑merger upside, or a broader market rally that could push HVMC above $11.50 before expiry. Historically, similar SPAC‑warrant structures see a high‑beta demand: the warrant’s implied volatility is 2‑3× that of the underlying share, and daily volume on the warrant ticker (HVMCW) can be 30‑50 % of the share’s volume in the first weeks after separation.

Trading implications

• Short‑term: Expect the Class A share to trade in a tight range (≈ $10‑$10.5) with modest liquidity. The warrant will open with a wider bid‑ask spread and higher turnover as traders price in upside potential.
  
• Long‑term: If the SPAC pipeline or de‑SPAC transaction delivers a valuation > $11.50, the warrant will experience a rapid price surge, out‑performing the share by 150‑300 % on a relative basis. Positioning a modest long‑warrant (or buying HVMCW outright) now can capture that upside, while keeping a core position in HVMC for dividend‑or‑cash‑flow exposure.
  
• Risk management: Because the warrant is a leveraged instrument, set tighter stop‑losses (≈ 10 % of the warrant price) and monitor the share’s price action; a breach above $11.50 is the primary catalyst for warrant‑price appreciation.
  

In short, the market will treat the two components separately: steady, valuation‑driven demand for the Class A shares and speculative, high‑beta demand for the warrants. A balanced strategy—core exposure in HVMC with a small, directional long position in HVMCW—captures upside while limiting downside.