Warrants are securities that enable the holder to purchase a security at a fixed price (referred to as the exercise price) for a fixed period of time. Generally these are longer-dated than options, and can have volatile values based on current market conditions.
This volatilty can be high and operate to an investor's disadvantage. The value of the certificate can drop to zero and, if it happens before it is exercised, the warrant could lose any of its redemption value. In addition, a warrant holder has no voting, shareholder, or dividend rights and therefore has no say in the functioning of the company, even though they are affected by the decisions and policies of that company and its management.
We do not generally purchase warrants outright, but have occasionally received them by participating in SPAC transactions or Initial Public Offerings.