But what’s interesting is that Tontine offered 200 million units at $20 each, with an entirely new type of SPAC structure. 2) Speaking of Ackman, this 12-minute video takes an in-depth look at the incredible investment he made earlier this year: The Greatest Trade Ever. Pershing Square's New SPAC; The Greatest Trade Ever - ValueWalk Churchill offered shares back in September 2020, and as its name suggests, it was the fourth offering from SPAC specialist Michael Klein. Yet with so many interesting privately held companies looking to come public, you can expect the SPAC industry to be full of excitement for the foreseeable future. The stock gained 3.3 percent on Feb. 2 and was trading higher on Feb. 3. The Starboard Value SPAC embedded a 1/6th tontine warrant in its shares. There've been some rumors about possible targets, most notably the privately held fintech company Stripe. https://www.fool.com/investing/2021/02/04/3-spacs-you-cant-afford-to-ignore In this core area for SPAC investors, is where Pershing Square truly shines. The company filed its S-1 on June 22nd under the name Pershing Square Tontine Holdings and ticker PSTHU. Unsubscribe at any time. Ackman has also made what I think will prove to be another brilliant move: exiting the hedge and plowing all of the gains into buying more of the stocks of the high-quality companies in his portfolio, whose stocks have all been whacked, including Berkshire Hathaway (BRK-B), Lowe's (LOW), Hilton Worldwide (HLT), Agilent Technologies (A), Restaurant Brands (QSR), and Starbucks (SBUX). Pershing Square Tontine Holdings, Ltd. TRADING QUOTES MANAGEMENT & BOARD Executive Officers William A. Ackman, Chairman & Chief Executive Officer; Director Mr. Ackman founded Pershing Square in 2003, and is principally responsible for its investment policies and implementation. To hedge his portfolio, he "purchased credit default swaps (CDS) on various investment grade and high yield credit default swap indices, namely the CDX IG, CDX HY, and ITRX EUR," which "were trading near all-time tight levels of about 50 basis points per annum.". If no transaction occurs within two years investors get their money back at par. The structure is much more shareholder-friendly than the typical SPAC, and the opportunities are compelling when so many businesses are being affected by the coronavirus. Keep your eyes on these three SPACs in particular, as what happens with them could well define the course of future activity in the area for months or even years to come. The SPAC broke many of the conventions that the industry set, including coming public with a stock price of $20 per share rather than $10. Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. He's Not Happy That You Know About It, Looking At Ray Dalio’s Stock Market ‘Lost Decade’ Prediction, Tesla’s valuation tumbles as stocks sell off, analysts bearish, The American Rescue Plan Passes Final Political Steps, Curaleaf Deal And Future Of Cannabis Market In Europe, ABML And LODE: A Recycled Story By Two Questionable Management Teams. Although traditional IPOs are still plentiful, you're also seeing many companies choose direct listings with stock exchanges. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. A SPAC is a public company that raises capital with the intent to merge, acquire, or otherwise combine with a yet to be determined private business. The Social Capital founder's Social Capital Hedosophia Holdings V (NYSE:IPOE) is just one of six SPACs that he has offered, and three successful combinations with the likes of Virgin Galactic Holdings (NYSE:SPCE), Opendoor Technologies (NASDAQ:OPEN), and Clover Health (NASDAQ:CLOV) speak for themselves. Market data powered by FactSet and Web Financial Group. Carlson Capital Returned 2 Percent For February thanks to these stocks, Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. The SPAC that will be launched by Ackman will be called Pershing Square Tontine Holdings and its shares will start to trade on the New York Stock Exchange 52 days after the IPO filings are presented, which could be around early September, considering that the filing was presented on 13 July – however, it could be much sooner than that if the date of the … We also believe that the economic and market dislocation resulting from the COVID-19 pandemic has created market conditions and a resulting set of investment opportunities in four principal areas that we intend to pursue. Pershing anticipates raising at least $4.0 to $6.45 billion, maybe more. The recent dislocations in both the stock market and private growth equity markets, combined with a number of high-profile private investment failures and disappointing IPO outcomes, have substantially reduced the amount of private funding available for these companies, while demands for liquidity from their investors have increased. We won't send you spam. Dan Caplinger has been a contract writer for the Motley Fool since 2006. Furthermore, the short-term impact of COVID-19 on many of these Mature Unicorns has, even with respect to many of the highest quality companies in this sector, reduced their revenues and cash flows, thereby increasing their need for additional capital... Third, the economic disruption of COVID-19 has substantially negatively impacted the revenues and cash flows of many large private equity portfolio companies. The firm's Double Black Diamond Ltd. was up 2.31% for February and 1.54% for the first two months. © 2011-2021 VALUEWALK LLC. Another popular alternative that has taken the investing world by storm involves special purpose acquisition companies, or SPACs for short. Deliveries of the Lucid Air luxury sedan are set to begin this spring, and with a price tag starting just under $70,000 and a maximum projected range of more than 500 miles, many auto aficionados are highly excited about the California-based company's prospects. Returns as of 03/10/2021. Yet many see even better times ahead for SoFi, and that could keep shares moving higher long after the SPAC merger is complete. "A real gentleman," adds David DeLucia, a former Goldman Sachs partner and chess opponent. All told, Pershing Square Tontine raised $4 billion to put to work toward finding an acquisition candidate. (function () { Due to the high … Pershing Square Tontine Holdings Ltd (NYSE: PSTH) is now typical of larger speculative special purpose acquisition companies (SPACs) that have risen solely on speculative fever. With financial services including loans, banking, and investments, SoFi is aiming to revolutionize the financial industry. A second offering that was designed specifically to benefit from steep market selloffs, the Saba Capital Tail Fund, was up an astounding 99%. First, as a result of the currently high degree of stock market and debt capital market volatility, it has become increasingly difficult for even a high-quality, well-managed, large capitalization company to execute a public offering on favorable terms... Second, over the past decade, numerous high-quality, venture-backed businesses have achieved significant scale, market share, competitive dominance and cash flow – we call these companies "Mature Unicorns." So we’ve no idea yet what PSTH will be investing in – it’s likely that it’ll take a minority stake in a mature business and speculation ranges from Airbnb to … Finally, an article on SPACs wouldn't be complete without at least one of the offerings from pioneering tech venture capitalist Chamath Palihapitiya. Some combinations aren't as lucrative as others, and some SPACs might not even find merger candidates at all. The future of these three SPACs could well determine how health of the entire business going forward. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world. Many of these companies have chosen to remain private, as there has been, until recently, limited pressure from their investors for liquidity, and large amounts of growth capital available from investors, mutual funds and hedge funds. ALL RIGHTS RESERVED. I know Boaz and agree entirely with this: Oddly, for the cut-throat world of big egos and sharp elbows, nearly everyone who crosses paths with Weinstein seems to... like him. The initial public offering seeks to raise $3 billion for Pershing Square Tontine Holdings. 3) I really enjoyed this in-depth profile of Wall Street legend Boaz Weinstein: Boaz Weinstein Is Making Bank. I also own a few grams of Gold and Silver. But if Ackman's SPAC somehow goes the 24-month period without finding a partner, that could be a huge setback for the SPAC industry overall. The nearly $11 billion Pershing Square Capital's publicly-traded vehicle, Pershing Square Holdings, is up 34.7% as of Tuesday, far outpacing the broader market. document.getElementsByTagName('head')[0].appendChild(jo); Because we believed that the coronavirus could only be stopped in Europe and the U.S. with an unprecedented economic shutdown, based on what we learned from China, we were confident that U.S. and European credit spreads would likely widen substantially from their near-all-time lows. SPACs are publicly traded stocks in their own right, but their only mission is to find a suitable privately held company to merge with. Breaking the mold, PSTH vowed to take no sponsor promote – a stark contrast to the typical 10-20% from most other teams. The SPAC's unique structure, combined with COVID-19 related volatility, should allow it to conduct a transaction at a favorable valuation. var r = Math.floor(Math.random() * (9999 - 0 + 1) + 0); Yet there've also been some who've attempted to debunk that idea, and thus far, there haven't been any announcements. })(); ValueWalk.com is a highly regarded, non-partisan site – the website provides unique coverage on hedge funds, large asset managers, and value investing. This structure is similar to that of the well-known Pershing Square Tontine Holdings. Not every special purpose acquisition company will be successful. Excerpt: Bill Ackman of Pershing Square Capital Management just made the greatest trade of all time (in my judgement – based on the percentage gain, dollar profit, the speed of the gain, and the perfect timing). SCHH V investors are excited about the potential combination, as the SPAC price has doubled since the announcement. - The IPO market is red-hot right now. The thing is, and unlike many SPACs, Pershing Square has yet to find a mate. With hundreds of SPACs in the market, it's hard to know which ones to follow. Pershing Square’s New SPAC; The Greatest Trade Ever, Please speak to a licensed financial professional, Ackman's Blank Check Company Could Raise Up to $6.45 Billion, Boaz Weinstein Is Making Bank. In light of their typically highly leveraged balance sheets, these companies will likely require substantial equity infusions to withstand the impact of the crisis... Fourth, the economic disruption of COVID-19 has also negatively impacted the revenues and cash flows of many large, high-quality, private family-owned companies, which will require them to raise equity capital. var jo = document.createElement('script'); Even a third, hedged Saba strategy that seeks to profit from arbitrage in the closed-end fund market lost only 1.5%, while the S&P 500 tumbled more than 7%. For just the first two weeks of March, the flagship Saba Capital Master Fund spiked 33%, according to a note sent to investors that was reviewed by Institutional Investor. jo.src = 'https://www.financialjuice.com/widgets/voice-player.js?mode=inline&display=1&container=FJ-voice-news-player&info=valuewalk&r=' + r; This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. Cumulative Growth of a $10,000 Investment in Stock Advisor, 3 SPACs You Can't Afford to Ignore @themotleyfool #stocks $CCIV $SPCE $PSTH $OPEN $IPOE $CLOV, Churchill Capital IV potentially merging with electric vehicle maker Lucid Motors, Pershing Square Tontine raised $4 billion, the company behind the popular SoFi financial app, SPAC Investors Are Ignoring This Hidden Danger -- and It Could Cost Them a Boatload of Money, Copyright, Trademark and Patent Information. That's a ton of speculation, and shareholders stand to lose a lot of a deal with Lucid doesn't materialize. On July 22, 2020, Pershing Square Tontine Holdings Ltd. (“Pershing Square Tontine”), a special purpose acquisition company (“SPAC”) sponsored by funds managed by hedge fund billionaire Bill Ackman’s Pershing Square Capital Management L.P. (“Pershing Square”), began trading on the New York Stock Exchange. Below, though, are three that investors really can't afford to ignore. Whitney Tilson’s email to investors discussing Pershing Square’s new SPAC; the greatest trade ever; Boaz Weinstein is making bank. ValueWalk also contains archives of famous investors, and features many investor resource pages. Pershing Square Tontine is likely to find a merger target, and when it does, it'll be big news. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. In short, he saw exactly what was going to happen – and figured out the perfect way to profit from it. 1) Pershing Square Capital Management just filed an S-1 for Pershing Square Tontine Holdings... Carlson Capital's Double Black Diamond L.P. fund was up 1.99% for February and 1.09% for the first two months of the year. He's Not Happy That You Know About It. Plenty of big-name companies have decided to come public now, and many of them are looking at some non-traditional ways to make their shares available to ordinary investors. Get alerts on PSTH - Pershing Square Tontine Holdings, Ltd. This will be the largest-ever "blank check" company (also known as special purpose acquisition companies, or "SPACs"). Among SPACs, Churchill Capital IV (NYSE:CCIV) has gotten the most attention by far lately. Subscribe to ValueWalk Newsletter. High-profile special purpose acquisition companies like Pershing Square Tontine Holdings (PSTH) and Social Capital Hedosophia Holdings V (IPOE) are struggling as investors rethink SPACs. We’re motley! Jacob lives with his wife and four kids in Passaic NJ. I wrote about this in my March 27 e-mail. Pershing Square Tontine Holdings is a blank-check company from the legendary investor Bill Ackman. jo.type = 'text/javascript'; Nevertheless, the amount people are paying up for a SPAC that seems to have the inside lane on a possible EV merger shows just how much activity there is in the electric vehicle space right now. Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. Black Diamond Partners L.P. gained 2.04% for February and 2.25% for the first two months, Read More. Mission: Providing a framework to improve your investing PROCESS, while collecting newsworthy information about trends in business, politics and tech areas. Tontine Holdings (PSTH SPAC) debuted in July 2020, raising a record $4B. Get the entire 10-part series on Warren Buffett in PDF. Legendary investor Bill Ackman's $5.8 billion Pershing Square Tontine Holdings (PSTH) took top position in the list. The fund, called Pershing Square Tontine Holdings is poised to become the largest special purpose acquisition company, or SPAC, on record when it begins trading on Wednesday. Pershing Square's SPAC will be called Pershing Square Tontine Holdings and will raise $4 billion by offering 200 million units at $20 per share. Pershing Square Tontine hasn't yet found a merger candidate, and that's caused some SPAC investors to get anxious about the price increase its shares have experienced lately. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Rumors have swirled for quite a while about Churchill Capital IV potentially merging with electric vehicle maker Lucid Motors. SCHH V has entered into an agreement to merge with Social Finance, the company behind the popular SoFi financial app. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. "He was this great combination of super polite, humble, and smart," says Ron Tanemura, who okayed hiring Weinstein at Deutsche in 1998. Good thing Pershing Square isn’t actually a tontine, but a special purpose acquisition company, or SPAC. What's amazing, though, is that Churchill Capital IV shares have more than tripled without any firm agreement with Lucid in place. Billionaire fund manager Bill Ackman founded SPAC Pershing Square Tontine Holdings (PSTH) in 2020. Pershing Square Tontine Holdings IPO details. It's the largest Churchill SPAC yet, having raised $1.8 billion. We've detected you are on Internet Explorer. PSTH came public in July 2020, but it has not named a merger target yet. jo.id = 'FJVoiceFeed'; Billionaire Bill Ackman’s SPAC Pershing Square Tontine Holdings (PSTH) rallied some 12% intraday on speculation that the special purpose acquisition company could be close to an M&A deal. According to this letter he just released, earlier this year he became "extremely alarmed about both the health risks of the coronavirus and its economic impact." Pershing Square Tontine Holdings (PSTH) had its IPO today but doesn’t yet have a business – it’s a Special Purpose Acquisition Company (SPAC) that first raises money through an IPO and then later invests that cash in an existing business. To be clear, the Bloomberg buyout is a rumor, with the media and software giant denying any deal with Pershing Square Tontine Holdings. By doing so, the privately held business gets to have its shares publicly traded, and early SPAC investors often get a nice payday as well as the opportunity to get in on the ground floor. He made almost a 100x return in less than two months, turning a $27 million investment into a $2.6 billion profit! We respect your privacy. Why Pershing Square Tontine Holdings Is Worth Considering When it comes to PSTH stock, investors are paying premium prices for this SPAC By GS Early Feb 23, 2021, 3:49 pm EST February 23, 2021 Save it to your desktop, read it on your tablet, or email to your colleagues, Q1 2020 hedge fund letters, conferences and more. Please speak to a licensed financial professional before making any investment decisions. The average SPAC in 2020 has raised $327 million. Here's a Bloomberg article about it: Ackman's Blank Check Company Could Raise Up to $6.45 Billion. Stock Advisor launched in February of 2002. The largest SPAC ever offered came from Bill Ackman's hedge fund in September 2020, and Pershing Square Tontine Holdings (NYSE:PSTH) has been a big hit.