The warrants, in fact, would give the Pershing Square hedge fund the ability to buy nearly 6% of the SPAC near today’s price over the next decade, regardless of how high shares go in the interim. With Pershing Square Tontine, the lack of dilution from founder shares and ability of Pershing Square to only exercise its warrants three years after an acquisition at 20% premium will likely result in greater alignment between the goals of public stockholders with that of the sponsor. In general, I really enjoy reading anything new and innovative in a prospectus, but I’m sort of hung up on this contingent distributable “tontine” warrant. Home » Weekly IPO Updates » INTEL » Pershing Square Tontine Holdings Ltd. 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. Pershing Square Tontine Holdings (PSTH) Pershing Square Tontine Holdings is a blank check company formed by Bill Ackman that went public in July 22, 2020 at a value of $4 billion and trade under the ticker symbol PSTH.U before the split of its warrants and shares. Meaning, are investors reimbursed $20 per share if a merger does not happen? By that I mean, the optics aren’t great.  If you’re a celebrated investor, and you can command top notch terms because everyone expects you to bring back a winner, why put in a feature that assumes the deal will not be strong enough to get investors to want to own the share on their own?  Instead, this feature is telling investors they might need to be incentivized right from the get-go.  It doesn’t seem to be coming from a position of strength or confidence and that’s what doesn’t seem to jibe for a sponsor of Bill Ackman’s caliber. It is somewhat curious that all independent directors, other than Steinberg, have media experience. However, let’s discuss this SPAC’s structure.  There’s a lot to unpack here, so in the interest of brevity, we’ll hit on the most salient points.  First up, you’ll notice this SPAC is a $20.00 unit, not the standard $10.00 unit we’re used to seeing, but a larger unit price makes sense for a SPAC of this size in order to create a more manageable share count.  Especially when you consider there could be an additional $3.0 billion in forward purchase units, on top of the $3.0 billion public units added to the current number of shares outstanding. on which date will we be able to buy shares? This structure is similar to that of the well-known Pershing Square Tontine Holdings. But with an increase in unit price, naturally the warrant triggers double as well.  For cash and cashless exercise, the trigger is now $36.00, whereas in $10.00 units the standard is $18.00.  For the warrant redemption for shares feature that we usually see at $10.00, it’s now registers $20.00 to match the $20.00 unit.  And finally, the Crescent Term, which we’re used to seeing at $9.20, is now $18.40 for Tontine. Nothing should be construed as investment advice. Pershing Square Tontine Holdings, Ltd. Warrants, exercisable for one share of Class A Common Stock for $23.00 per share (PSTH.WS) Stock Quotes - Nasdaq offers stock quotes & … At $20 the opportunity is best thought of as an intelligent speculation. These are valued at … Remember that Pershing Square Holdings has 10-year warrants on 5.95% of a company that is brought public through Pershing Square Tontine. Additionally, these forward purchases of units at $20.00 are different than the public units in that the forward purchase units are comprised of one share and 1/3 of a warrant.  As opposed to the public units at $20.00 which gives you one share plus 1/9th of warrant.  But…the public has the ability to receive a contingent right to receive an additional 2/9ths of a warrant, as long as they don’t redeem their shares at the combination vote.  So assuming no shareholders redeem, you would have your 1/9 redeemable warrant and also receive a contingent “distributable” 2/9ths warrant.  And if you add those together, it’s equivalent to a 1/3 warrant.  BUT….this is where the “tontine” comes in again…. In contrast, in Tontine Holdings, Pershing Square and its affiliates (including Tontine board members) are paying $67.8 million for warrants to acquire 6.21% of the company. it becomes a real Sophie’s Choice of deciding whether to sacrifice your share or get your contingent warrant.  But layered in with that decision is you now need to guess what everyone else is going to do to figure out which path is more economically meaningful.  But if interest rates remain close to zero for the foreseeable future, and the redemption value of the share remains close to $20.00 at the time of combination, the equation become less complicated. The Starboard Value SPAC embedded a 1/6th tontine warrant in its shares. SEC Filings. PSTH is currently the largest SPAC to … Robinhood raised a $280 million Series F at a $8.3 billion valuation in May of this year and has seen their business boom since the start of the pandemic. So, Pershing Square will only participate in the value of their warrants if and when the stock increases 20% from the offering price of $20. : +44(0) 1481 745001. We’ll come back to the “tontine” concept shortly when we discuss the contingent “distributable” warrants. Investor Relations. SC 13G/A [Amend] – Statement of acquisition of beneficial ownership by individuals . Whereas, most SPAC sponsors purchase 20% of the total shares outstanding for a nominal price, PSTH will be purchasing a Sponsor Warrant (Bill Ackman) and the Directors can purchase a Directors Warrant, with both having a ten year life.  These Sponsor and Directors Warrants are only exercisable when the share price reaches $24.00.  This means that if the PTSH team were to acquire a company, and the share price never reaches $24.00 during the 10 years post-combination close (meaning, it’s not a good deal), they do not receive any “promote” shares. Files $3 Billion SPAC. If the company fails to identify a merger candidate early on and begins to approach the capital return deadline, the share price may drop sharply providing investors an opportunity to buy at a significant discount to the offering price. These areas are: high quality companies desiring an IPO but do not want the risk and expense associated with the IPO process, “Mature Unicorns” that need liquidity or want to go public with less risk than a traditional IPO, large highly levered private equity portfolio companies that need an equity infusion due to COVID-19, and large private family-owned companies that need an equity infusion due to COVID-19. Please read our Terms and Conditions for further details. Nonetheless, that is potentially an additional $3.0 billion in forward purchases on top of the $3.0 in public proceeds.  That buys this SPAC a lot of unicorn bullets. The Registered Office. I've said if the warrants hit $36 I'll sell half, if they don't everything I'm holding long and converting warrants. Press Releases. However, the actual filing doubled that number, and then some, if you factor in the committed $1 billion Forward Purchase Agreement. no, common will continue to fluctuate around $20 based on market conditions. THIS is what 2/9 Tontine means. This is different than your typical SPAC where the sponsors receive promote “founder shares” for the bargain basement price of just $25,000, and even if the share price tumbles well below the $10.00 initial unit price, they still make out okay.  However, as for how many shares the Sponsors or Directors will be receiving is indeterminate as of yet since it’s predicated on the size of the combined company.  However, it does say that the warrants, “will be exercisable, in whole or in part, for that number of shares constituting 5.95% of the common shares of the post-combination entity on a fully diluted basis (including all common stock issuable upon the conversion or exercise of outstanding securities, whether or not convertible or exercisable at such time). So, does Bill Ackman really need to incentivize investors to stay in his deals? Pershing Square Tontine Holdings, Ltd. (the “Company”), a Delaware corporation, is a newly organized blank check company formed for the purpose of effecting a … I don't see this as a $100/share play this year. PSTH News: Pershing Square Tontine Holdings, Ltd. Notes Disclosure: 02/26/2021 10:26:00 AM: PSTH News: Bill Ackman tweets trigger chatter on Pershing Square Tontine deal: 02/26/2021 08:23:22 AM: PSTH News: Amended Statement of Ownership (sc 13g/a) 02/16/2021 06:22:38 AM: PSTH News: Statement of Ownership (sc 13g) 02/12/2021 05:27:35 PM However, the general rule of thumb for SPACs is, if you have to economically incentivize investors to stay in a deal, it’s a bad deal. It says the forward purchasers may “elect to purchase up to an additional aggregate of $2,000,000,000 of units.” Which sounds great, but no one is going to hold their feet to the fire if they decide they don’t want to make any additional purchases.  They’re not obligated. It can grow to 3/9 or 4/9 if people choose not to hold through the merger, because the number of warrants is constant and will all be given out to someone. This company, which is Ackman's SPAC, completed a $4 billion IPO. The sponsor warrants have a strike price 20% above Pershing Square… Mais là, avec Pershing Square Holdings et Pershing Square Tontine Holdings, ... owns 91% of the PSTH Sponsor Warrants, and is a minimum $1 billion forward purchaser, alongside the two Pershing Square private funds, of PSTH common stock and shareholder warrants, with the right to increase its forward purchase investment by up to an additional $2 billion. Either way, a $3.0 billion dollar SPAC is pretty exciting, no matter how you look at it. It'll be years until that day though. Bloomberg the Company & Its Products The Company & its Products Bloomberg Terminal Demo Request Bloomberg Anywhere Remote Login Bloomberg Anywhere Login Bloomberg Customer Support Customer Support However, at a minimum, they will need to purchase $30.353 million just to cover underwriting fees and offering expenses and keep the trust whole at $20.00. When he stays in his circle of competence he rarely misses. Pershing Square Tontine Holdings, Ltd. (US:PSTH) institutional ownership structure shows current positions in the company by institutions and funds, as well as latest changes in position size. In addition to the 22,222,222 warrants issued at the time of Pershing Square Tontine Holdings’ IPO, another 44,444,444 warrants will be distributed … Unique to Ackman’s SPAC is the fact that he didn’t get a sweetheart deal for putting Pershing Square Tontine Holdings together. The comparison between the SPAC and the tontine is interesting as investors that cannot stick around in either vehicle to the end, is one man’s gain, based on another man’s loss. The name “Tontine” could very well be an ode to a historically significant insurance policy that originated hundreds of years ago and came to prominence in the early 1900’s in the United States. Pershing Square Holdings also committed $1 billion to the vehicle. There is also a good chance that once a target is identified the business combination can be analyzed with enough rigor to build a position. Pershing Square has elected to purchase its warrants at fair market value and make the warrants exercisable at $24 per share. For the past 3 months, PSTH delivered a decent 24.21% return and settled at … Because a SPAC, by definition, cannot reliably be valued, they are largely a bet on the jockey. It is no surprise that the company has assembled an impressive group of directors to oversee the SPAC, and it should help aid in creating an attractive investment pipeline. However, the deferred commission is capped too at $56,250,000.  But those are still very nice SPAC fees. Major shareholders can include individual investors, mutual funds, hedge funds, or institutions. July 22 (Reuters) - Pershing Square Tontine Holdings Ltd ::PERSHING SQUARE TONTINE HOLDINGS, LTD. Yesterday, eyes grew wide all over SPAC Land when Bill Ackman finally filed his expected SPAC IPO, Pershing Square Tontine Holdings, Ltd., .Previously, it was rumored that the Pershing Square SPAC would come in at around $1.5 billion.. Yesterday, eyes grew wide all over SPAC Land when Bill Ackman finally filed his expected SPAC IPO, Pershing Square Tontine Holdings, Ltd., (PSTH.U). All told, having a deal this size get filed, along with a new and different structure, created quite a bit of chatter today.