PSTH - Dear PSTH Stock Fans Mark Your Calendars for July 26
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Bill Ackman’s special purpose acquisition company (SPAC), Pershing Square Tontine (NYSE:PSTH), announced that it would suspend its operations “except for winding up its business after July 26.” The $4 billion obtained by the SPAC will be returned to its investors on July 26, with each investor receiving about $20.05, net of taxes per share of PSTH stock, and Pershing Square Tontine will not merge with any other company.
Finally, Pershing Square Tontine stated that it intends to dissolve and liquidate itself “as promptly as reasonably possible” after refunding the money that it received from its investors.
In a letter to investors, Ackman stated that he is now seeking to launch “Pershing Square SPARC Holdings, Ltd., a privately funded acquisition vehicle which intends to issue publicly traded, long-term warrants.” The billionaire investor added that he plans to give these warrants to PSTH security holders who own either PSTH stock or Pershing Square Tontine’s warrants “as of the close of business on July 25, 2022.”
For each share of PSTH stock, investors will receive 0.5 of the new warrants. Meanwhile, owners of Pershing Square Tontine warrants will receive an equal number of the new warrants.
Ackman anticipates that the new warrants will be issued in Fall 2022.
PSTH Stock and the State of the SPAC Market
Ackman reported that Pershing Square Tontine was unable to carry out a merger primarily because of “the adverse market for SPAC merger transactions.” Among the factors causing that situation are “the extremely poor performance of SPACs that have completed deals during the last two years.” As well as “the high redemption rates of SPACs.” He cites these factors along with the “risk and uncertainty” caused by a lawsuit filed against Pershing Square Tontine and “new SPAC rules proposed by the SEC.”
Another factor cited by Ackman for his SPAC’s suspension was the inability to find a target that could delay going public “until market conditions are more favorable.”
The billionaire investor added that “the SPAC and IPO market [is] effectively shut today.”
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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