GS Acquisition Holdings Corp. II (GSAH), re-filed its S-1 on Wednesday night, with a notable change – their warrants included in their units, which were originally 1/3 warrants, are now 1/4 warrants.

Oddly enough, just a couple of months ago we saw Social Capital Hedosophia re-file S-1s for IPOB & IPOC to adjust its warrants the other way (poor market conditions caused it to increase its warrant size from 1/4 to 1/3). Now, only a day after Bill Ackman filed for the largest SPAC of all-time with merely 1/9 of a warrant, GSAH II is taking advantage of the favorable market conditions to reduce its warrant size.  In tandem, the sponsors will now be purchasing their at-risk private placement warrants at $2.00, as opposed to the $1.50 purchase price for the 1/3 warrants they were previously purchasing.

This is Goldman’s second dip into the SPAC market and it comes after a well-received merger with Vertiv and GS Acquisition Holdings I.  So going from a 1/3 warrant to a 1/4 warrant is not all that surprising given this is a well-known sponsor and a team batting 1/1 in a hot SPAC market.

The weight of warrants in SPAC IPOs seems to be as cyclical as debt covenants – when things are good, investors will concede some protections since there is plenty of demand, but once the cycle turns we can expect a renewed pressure for increased warrants to make up for poor equity prospects.

But at the risk of saying “it’s different this time” the large capital raises and high-profile mergers could ultimately attract enough consistent demand for the downsizing in warrants to be a more secular trend. Then again, these are not normal times and we have only a few data points to go off of.

Additionally, today’s amendment included four new Director Nominees – Senator William Frist, Stevem Reinemund, David Robinson and Martha Sullivan. So now that the team has been fully rounded it out, this IPO should be pricing shortly.  You can find the new S-1 filing for GSAH HERE.