This has been a fascinating — and volatile — year for special purpose acquisition company (SPAC) mergers. After the bubble seemingly burst, former President Donald Trump turned things around with his Digital World Acquisition (NASDAQ:DWAC) deal. Now, investors are once again closely watching blank-check companies, including some older names that have yet to find targets. One such name in the spotlight today is Pershing Square Tontine Holdings (NYSE:PSTH). Although PSTH stock has faced controversy, shares shot up today on social media chatter.
What’s Happening With PSTH Stock?
Shares of PSTH stock have been enjoying an excellent, albeit turbulent day, after spiking this afternoon. There have been some ups and downs, but shares ultimately closed up 2%. This growth spurt comes on the heels of a boring week, and an even less exciting month, during which shares stayed almost stagnant, hovering between $19 and $20 apiece.
SPAC leader Bill Ackman has met plenty of obstacles this year as he’s tried to find a profitable partner to merge with his SPAC. He set his sights on Universal Music Group (OTCMKTS:UMGNF) this summer, but negotiations with the U.S. Securities and Exchange Commission stopped the deal. This prompted him to begin the process of converting the company to a special purpose acquisition right company (SPARC) in an attempt to sidestep regulations.
This would also allow the company to function in a more shareholder-friendly fashion.
Today saw some new speculation emerge via Twitter, and retail investing forums have been buzzing.
PSH call highlights:
1. Ackman confirmed court case has no effect on $PSTH deal front
2. SPARC S1 filing by 11/29
3. SPARC warrants exercised will receive SPARC2 warrants
4. $PSTH search continues with one VERY attractive target @BillAckman @jackiereses @RealFranMcGill
— PSTH News (@PSTH_News) November 18, 2021
Why It Matters
After a period of relative silence from Ackman, it seems investors were excited from the update. It seems that this update came in the form of an investor call for his hedge fund, Pershing Square.
As we can see, Ackman seems to have found a partner, but that’s only the tip of the iceberg. He also intends to file the S1 necessary for a merger to move forward by the end of December. According to the poster, there is also indication that the current court case around the failed UMG-PSTH merger will have any effect on the impending deal.
The bottom line — at least according to speculators — is that not only is there is a deal on the table, it is close to moving forward. This type of hype is generally enough to send a blank-check company shooting up.
What It Means
PSTH stock has seen some growth today for the first time in weeks and it’s likely it will continue when and if investors get more concrete information. The ball is, once again, in Ackman’s court.
As the Nov. 29 catalyst approaches, PSTH stock is absolutely worth watching. Social media was buzzing today for good reason. We may be on the verge of seeing Ackman finally reach the end of his SPAC odyssey and find a partner. In the short term, such a deal would certainly mean more gains for PSTH stock.
However, because this speculation is mostly stemming from social media, investors should be extra careful. Wait for more evidence of these updates and do your own research.
On the date of publication, Samuel O’Brient 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.
