What happened Investors are cheering electric vehicle start-up Fisker's (NYSE: FSR) announcement Friday morning that it would redeem its outstanding warrants. Just after the market open at 9:35 a.m. EDT, Fisker shares were up more than 5%. So what Fisker announced that as permitted under the terms of the warrant agreement made with its special purpose acquisition company (SPAC) suitor, the company will redeem all outstanding warrants to purchase common shares. In a move that is deemed shareholder friendly, the company is doing it on a cashless basis. This means that full new shares will not be converted directly from those outstanding warrants, and instead warrant holders will have to surrender a portion of a share in place of cash. The bottom line for existing shareholders is the number of shares outstanding will be lower than many had anticipated. Fisker Ocean electric SUV. Image source: Fisker. Now what In a summary of why it's a positive development for shareholders, Fisker chairman and CEO, Henrik Fisker, said in a statement, "As compared to a cash exercise, this not only limits dilution to our common shareholders, but we believe it to be simpler and less burdensome to holders of the public warrants, along with being reflective of our strong balance sheet and confidence in Fisker's business outlook." Fisker added that it simplifies the company's capital structure and removes most of the warrant overhang. Fisker expects to begin delivering its all-electric Ocean SUV in the fourth quarter of 2022. It will initially be made in Europe using automotive supplier Magna International EV platform. Shareholders are pleased today both by the fact the company has the ability to eliminate those existing warrants and by the increased portion of the company they now own. 10 stocks we like better than Fisker, Inc.When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Fisker, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of February 24, 2021 Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source