Editor’s Note: This article was updated on March 2, 2021, to correct Pershing Square Holdings’ IPO offer price.
Everybody loves special purpose acquisition companies (SPAC’s) nowadays, right? Okay, not everybody does, but they’ve made a lot of money for some investors. One particularly buzz-worthy one is Pershing Square Tontine Holdings (NYSE:PSTH), and the holders of PSTH stock are undoubtedly hoping for some big news.
Perhaps they’re anticipating the sizable price moves that they witnessed in other SPAC stocks. One example would be Landcandia Holdings II, which formerly traded under the symbol LCA and morphed into Golden Nugget Online Gaming (NASDAQ:GNOG) stock.
Another one would be Switchback Energy (NYSE:SBE) stock. Will PSTH stock make a major move like these other ones did?
As we’ll see, handful of recent tweets from a famous financier might offer some clues. For now, though, let’s commence with a summary of the stock’s price moves thus far.
A Closer Look at PSTH Stock
Here’s what really interesting about PSTH stock. Typically, pre-deal-announcement SPAC stocks tend to stay fairly close to $10. That’s because the market doesn’t yet know which company the merger target will be.
Pershing Square Tontine Holdings actually started out priced at $20, but the bulls reached the $25 milestone in November of last year, and even managed to push the stock up to $30 in February of this year.
Pershing Square Tontine Holdings shares have currently settled around $29.
It will be interesting to see if the bulls can hold that level — and whether a merger deal, when it’s finally announced, will sustain the bulls’ enthusiasm or disappoint them.
Ackman the SPAC Man
If you’re even thinking about owning Pershing Square Tontine Holdings shares, you’ll definitely want to learn about William “Bill” Ackman, the company’s chairman and CEO.
He’s a famous activist investor and hedge fund manager with some fiscal hits — and some misses as well.
InvestorPlace contributor Chris Markoch observed, for instance, that Ackman’s short-sell play in Herbalife Nutrition (NYSE:HLF) didn’t end particularly well.
Moreover, Ackman made a disastrous bet on Valeant Pharmaceuticals stock (now Bausch Health Companies (NYSE:BHC)) , which certainly didn’t help his reputation.
On the other hand, Ackman famously launched the blank-check company Justice Holdings, which acquired Burger King. So, we can count that as a major victory.
Plus, Ackman’s hedge fund reportedly made $2.6 billion from a $27 million investment in bond-related financial instruments when the stock market crashed in March of 2020.
It’s a mixed track record, admittedly, but a winning one overall. Therefore, it’s understandable if investors are willing to wager on Pershing Square Tontine Holdings shares even without knowing the acquisition target.
Investors are betting on Ackman’s business acumen, plain and simple. Or, as I’ve said before, they’re betting on the jockey more than the horse.
It sure would be nice to be able to read Ackman’s mind, wouldn’t it? Plenty of investors would like to get some insight into what he’s planning for Pershing Square Tontine Holdings.
While we can’t read Ackman’s mind, at least we can read his tweets. Three of them should be of particular interest to current and prospective investors.
I will attempt to reproduce Ackman’s tweets here. I will also include the context, since Ackman’s tweets wouldn’t make much sense without it:
@PKRTOR: “it would be awesome if PSTH longs were given first preference to buy into PSTH-II at the IPO price (presumably $20/share), rather than having to buy in secondary when it launches. Would be a great way to reward your loyal investors $psth”
@alexanderbittan: “That would be amazing! Curious how this would work and how to validate a ‘PSTH Long’ but look forward to participating.”
Ackman: “We have the technology”
@AmanSha45091332: “Bill…can you atleast confirm that PSTH will be announced first before PSTH2”
Granted, Ackman’s responses were rather brief, but investors are hungry for any morsels of information they can get. One thing’s for sure: quite a few Pershing Square Tontine Holdings investors would gladly accept a per-share price $20, if given the opportunity.
The Bottom Line on PSTH Stock
Ackman’s reputation has many Pershing Square Tontine Holdings shareholders ready and willing to take a chance on a pre-deal-announcement SPAC stock.
And with Ackman’s recent tweets getting some fresh buzz going, it will be exciting to see what comes next for Pershing Square Tontine Holdings.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
View more information: https://investorplace.com/2021/03/based-on-bill-ackmans-tweets-psth-stock-could-be-ready-to-move/