PSTH - Bill Ackman Is Dissolving His $4 Billion SPAC -- Will Others Follow?
Special purpose acquisition companies, or SPACs, have been a part of the investment world for years, but to say they surged in popularity in 2020 and 2021 would be an understatement. Seeking to capitalize on the opportunities in the market created by the COVID-19 pandemic's disruption, hedge fund billionaire Bill Ackman launched Pershing Square Tontine Holdings (NYSE: PSTH) in June 2020.
Pershing Square Tontine was, and still is, the largest blank-check company ever created, raising $4 billion in capital. And while investors had high hopes that Ackman would use the vehicle to take a massive private company to the public markets, it didn't play out like that. We recently learned that Ackman has decided to throw in the towel and dissolve the mega-SPAC as its deadline to complete a merger nears.
Pershing Square Tontine Holdings was one of the most hyped SPACs of the 2020 boom. Investors expected the company to land a whale; fintech giant Stripe had been a rumored target, and it is confirmed that the SPAC even held discussions with Airbnb (NASDAQ: ABNB) before it decided to complete a traditional initial public offering (IPO) instead. Ackman ultimately reached a deal to use some of the SPAC's capital to buy a 10% stake in Universal Music, but regulators had a problem with this unconventional deal structure .
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Bill Ackman Is Dissolving His $4 Billion SPAC -- Will Others Follow?