[ad_1]
Bill Ackman won’t be announcing a merger partner for his SPAC by the end of March, and many of his fans are unhappy about that.
Last November, Ackman told investors in his hedge fund that he hoped to announce a deal for Pershing Square Tontine Holdings, his $ 4 billion special purpose acquisition company, in the first quarter.
But in a letter released on Monday, Ackman said he wouldn’t be able to announce anything until March 31 – two days from now.
“While we previously thought that we would be able to announce a potential transaction by the end of this quarter, we will not be able to do so,” Ackman said in a letter as part of the 2020 annual report from Pershing Square. Holdings, its publicly traded hedge fund.
Naturally, Ackman fans are disappointed.
“Morale is extremely low in the subreddit,” one wrote in a direct message on Twitter to Institutional investor, with reference to Tontine’s private investors who post there.
In an era of SPAC mania, retail investors have flocked to Tontine, with numerous call options that expired worthless on March 19, according to their accounts on Reddit and Twitter. While many have canceled the calls, volatility around SPACs this year has added to their losses, another retail investor said. II. He estimated those losses could exceed $ 100 million, based on CBOE call option data.
Tontine’s shares, which went public at $ 20 a share in July, were trading below $ 24 on Monday afternoon, down less than 2.5% for the day. They had climbed to $ 34 on February 16, before the SPAC market started to crater.
Speculation about Ackman’s SPAC has been rampant on Reddit, where the 11,600 members of the Tontine’s Stock Ticker (PSTH) subdirectory scoured the hedge fund manager’s Twitter feed and public statements for clues about the hedge fund manager’s public statements. ‘agreement.
But Ackman dashed their hopes for more clues.
“We do not intend to make any announcements on the progress of the PSTH transaction until we reach a definitive agreement,” he said in Monday’s letter. Ackman, who already said II that he was watching the Reddit group and “worked very hard not to disappoint them,” declined to comment.
While many Reddit users may have had the March 31 deadline in mind, Ackman had previously suggested that the deal might not come to fruition as soon as he hoped.
“I have made previous public statements, which I would always like to achieve. . . but we’re not entirely in control, ”Ackman said, according to a transcript of his hedge fund’s annual investor meeting that was recently posted to the Reddit forum. This meeting took place on February 18.
Some investors wish he never had their hopes. “Extremely disappointing,” the longterminvestor37 wrote on Reddit Monday morning. “People bet on options and it was a risk some took and lost, but for long-term shareholders what he did was a slap in the face. It would have been better if he hadn’t provided a timeline.
Of course, Ackman never promised that a deal would be done by the end of the quarter. But the still optimistic Ackman appeared optimistic about the prospect.
“In terms of timing, what we said at the time of the IPO was that we said it would take us, we thought about six months to identify a target that we would be able to announce. deal by some time in the first quarter, then close the deal in the normal course thereafter, ”he said on the November investor call. “Nothing that we have experienced to date suggests that we will not meet the deadline.”
As is the norm for PSPCs, Ackman has two years from Tontine’s IPO, dated July 22, 2020, to close a deal. He structured the PSPC to encourage long-term investors to stay, and that is still his message.
“Eight months after the launch of PSTH, we remain convinced that an investment in PSTH will generate very attractive long-term returns, even from the current PSTH share price,” he wrote in his letter from Monday.
Some members of Reddit echoed Ackman’s own attitude. “If you are a long-time shareholder you shouldn’t worry about this,” wrote a Reddit member who claimed to be a private equity-funded businessman.
Others have said they learned their lessons about the speculative nature of investing in PSPCs before a deal was announced – but they’re not ready to stop gambling.
“I’ll never invest in pre-DA spaces again,” AwedOwl wrote, quickly adding, “Rollllll those April $ 20c. Baby needs a new pair of shoes. “
[ad_2]
Source link