Had Enough PHUN with D’WAC Trades? Buy Microsoft Options
The warrants, which trade under the symbol DWAC, are still trading at over $26 per share as of Wednesday midday. If you subtract the exercise price of $11.50 from the current stock price of around $60 per share—to calculate their intrinsic value—you have an intrinsic value of $48.50 per warrant. If you really believe that a deal will be made and the warrants will be exercisable, then bet on those over shares of DWAC.
The company crushed expectations on Tuesday when it reported its fiscal Q1 2022 earnings. Cloud revenue jumped 36% year-over-year, leading Wedbush analyst Dan Ives to say on Yahoo Finance Live that there is “…more fuel in the engine to drive this stock higher.”
How far can Microsoft go? Well, the sky's the limit when it comes to the corporate cloud space it is dominating, a space that is still in its infancy. The price target for Ives is $400 per share, which for a stock that has jumped over 40% year-to-date still offers a significant upside from its current Wednesday price of $324 per share.
In the end, though, it's really all about the cloud.
“This is a $2 trillion market that’s still in the third inning of playing out,” Ives said. “On a cloud transformation I think that’s how you get a stock with a four in front of it.”
A 30% return over the mid-term on a stock that could not be a safer long-term bet? How Phun would that be?
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