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What Company Will Go Public With Pershing Square Tontine Holdings?

By Matthew Frankel, CFP® - Mar 23, 2021 at 6:21AM

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We don't know what Bill Ackman is targeting, but it can be fun to think of the possibilities.

There are hundreds of pre-deal SPACs in the stock market right now, but Pershing Square Tontine Holdings (PSTH 0.08%), the $4 billion blank-check company backed by billionaire investor Bill Ackman is perhaps the most closely watched of all. In this Fool Live video clip, recorded on March 15, contributor Matt Frankel, CFP, and Industry Focus host Jason Moser discuss some of the possible targets Ackman could try to take public.

Matt Frankel: There are some that are kind of -- I've heard about 20 companies mentioned and I thought of a few of my own. We're going to run through a few of these and I want to see which ones Jason wants them to take public.

Jason Moser: This is great. I'm looking forward to this.

Frankel: Four that I think are on the more likely side of it. One is Stripe, the financial services company, which just raised capital. They just became a little less likely, but this has been the one that everyone has been rumoring all along, Stripe the payment processing company. They just raised capital with a $95 billion valuation.

Moser: I saw that.

Frankel: They're definitely out of the realm of most SPACs, but not this one. The Bloomberg Company is one that has been heavily rumored for this one. I think that could happen. I think shareholders wouldn't be disappointed if that was it. That's not a terribly exciting business in my opinion. One thing worth noting is Ackman has really had success in restaurant investments. Subway is one that's been heavily rumored.

Moser: Oh, wow. That's an interesting name. I would not have thought about that.

Frankel: A less likely restaurant that he could take public will be Chick-fil-A. Everyone pretty much says that they don't want to go public, which I agree with, but Ackman has pulled off crazier stuff before. Another one, FanDuel, currently they're a subsidiary of Flutter (FLTR -1.16%) and we know DraftKings (DKNG 1.05%) was arguably the most successful SPAC IPO yet. They're a subsidiary of Flutter Entertainment who has expressed interest in spinning it off. SPACs can spin off parts of existing public companies. That's within the realm of possibility. Those are some of that I see are on the more likely end of things. Now, let's have some fun and talk about some of they're not quite as likely. [laughs] My Holy Grail. I'm a Pershing Square Tontine shareholder, my holy grail is SpaceX. If you were to take SpaceX or even spin out Starlink, the internet portion of it, that would be my Holy Grail for a them to take public. Robinhood has been rumored, even though Robinhood has filed for a traditional IPO, that they don't actually have to go through with independent if they don't want to. They could go public through this. Chime, which is essentially a bank at this point. One company I heard rumored recently is WeWork. Bringing WeWork back from the dead.

Moser: Yeah. Interesting.

Frankel: Ackman has a history of making value-oriented real estate plays. He invested in a company called General Growth Properties that was bankrupt during the financial crisis.

Moser: I remember that.

Frankel: That's where Howard Hughes Corporation (HHC -0.05%) came from. It was a spin-off of GGP. That's why he is the head honcho there. Fidelity is one that I've heard. People don't think of as a private company, but it is. Fidelity, the investment firm. One that as a Jersey boy, I would love to see this one be true, Wawa, the convenience store chain is one that I've heard rumored, but that's another one that's long said "we like being family and we don't want to go public." That's a pretty cool list of companies in most other SPACs couldn't even dream of acquiring. They are all within the realm of possibilities valuation-wise.

Moser: That could be interesting. Yeah. That to me seems to be probably, one of the more enjoyable parts of this would be trying to identify the target, and if you're someone like Bill Ackman, who's obviously been at this for a while, has a lot of experience as an investor, you got to imagine he's casting a very wide net. It's so difficult, it seems, to be able to find those compelling targets, because either A, they've got their own plans on how they want to go about it, or B, maybe they just have no interest in living life as a publicly traded company. It's always worth remembering while that's what we focus on, living life as a publicly trading company is a difficult thing. You are under the microscope. I would venture to say that while I think it would be cool to see Chick-Fil-A out there as a publicly traded company, I don't know if they have an interest in doing that. Maybe they do, but they just don't strike me as really having that aspiration.

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Stocks Mentioned

Pershing Square Tontine Holdings, Ltd. Stock Quote
Pershing Square Tontine Holdings, Ltd.
$19.84 (0.08%) $0.01
The Howard Hughes Corporation Stock Quote
The Howard Hughes Corporation
$86.51 (-0.05%) $0.04
Flutter Entertainment PLC Stock Quote
Flutter Entertainment PLC
$8,886.00 (-1.16%) $-104.00
DraftKings Inc. Stock Quote
DraftKings Inc.
$14.01 (1.05%) $0.14

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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