Here's my first look at Bill Ackman's Pershing Square Tontine Holdings (PSTH) and why I'm using it as a spec play! Revolutionizing SPACs and making them good!?

📚 Pershing Square Tontine Holdings (PSTH) Prospectus: https://bit.ly/2P5G8vu
✅ Free Stock with Robinhood: https://bit.ly/2Uw64U9

Let's face it, a lot of SPACs are scammy. They are designed to make profits for the sponsor, bankers, attorneys, but they don't really care what happens to the small investor. HOFV anyone? In fact more than half of the SPACs in 2020 are trading for less than their IPO price!

Well we have our man of the people, Bill Ackman trying to change that with Pershing Square Tontine Holdings (PSTH) stock. They have raised 4 billion dollars to make a 7 billion dollar SPAC, creating a new record by a large margin. Compare that with the average of 300m in 2020 and you realize why PSTH is a beast of its own. Because of that size, Bill Ackman and his team will be able to chase what they call a mature unicorn, meaning an established company that generates cash flow and will be a good long term buy and hold stock.

As I’ve talked about often, the typical SPAC favors trading and arbitrage. A lot of investors will sell their shares at a small profit or break even and keep their warrants for free. Other traders just buy warrants to flip later for a profit. These guys aren’t invested in the vision, they just want a quick profit and ciao, they’re gone.

Bill Ackman and Pershing Square Tontine Holdings (PSTH) are using a different structure to cater to long term investors instead. Each unit only comes with 1/9th of a warrant, which is really low. But the catch is if you keep your shares until the merger, you get an extra ⅔ plus a pro-rate of ALL the warrants that were abandoned by people who redeem. This is really powerful. Not only does it incentivize people to be in it for the long haul, it makes it much less appealing for people to dump their shares after a target is acquired because they’ll only have 1 warrant per 9 shares rather than the usual 1 warrant per 3 shares. In theory there should be LESS selling pressure than we’ve seen in other SPACs. Makes sense?

So of course this is very speculative. As of filming this, they don't even have a letter of intent yet. This is purely investing in the team and the strategy. I have no problem with it because I am very impressed with the structure of the fund. Rather than getting 20% sponsor shares, PSTH's sponsors are only getting 6.21% and ONLY if the stock price goes up 20%. Plus, they are committing for at least 3 years. That's like dating for 3 years rather than a quick hookup on Tinder. I like the long term vision and it's still very early so we can get into this one close to IPO price, making the downside risk fairly low.

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DISCLAIMER: I am not a licensed financial advisor, CPA, attorney, etc. I do not know you or your personal situation. All investments involve some risk, and you should always consult with a licensed professional when in doubt.
These videos represent my views and opinions only and should NOT under any circumstance be considered financial advice. I am simply chronicling my journey to financial independence and giving my thoughts on various investments and strategies. They may or may not be applicable to you.
These videos represent my views and opinions only and should NOT under any circumstance be considered financial advice. I am simply chronicling my journey to financial independence and giving my thoughts on various investments and strategies. They may or may not be applicable to you.