When hedge fund manager Bill Ackman launched Pershing Square Tontine Holdings (PSTH), the largest SPAC in history, many investors were expecting him to take an exciting, fast-growth business like Stripe or even SpaceX public. So, it's fair to say that many were disappointed to learn that the primary use of the capital will be a 10% stake in Universal Music Group. However, in this Fool Live video clip, recorded on June 7, Fool.com contributor Matt Frankel, CFP, explains to Jason Moser why as a value investor, he's still excited to be a Pershing Square Tontine shareholder. 

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Matt Frankel: "Since we know more about Pershing Square Tontine Holdings' tentative plans, are you more or less excited about buying into it?" I'm still excited but in a different way. The whole reason to buy into a SPAC that you don't know their target is because it's a lottery ticket. People who bought into the SPAC that ended up taking Lucid public won the lottery, that was like the SPAC lottery. You can say something similar about DraftKings (DKNG 0.71%), and SoFi (SOFI -0.80%). Pershing Square, I've mentioned before that my holy grail for a SPAC to take public would be SpaceX. If that had been what they announced, Pershing Square would be a $100 stock today.

Jason Moser: Probably so.

Frankel: It was a very low probability of happening, to be clear. But that's why you get excited about buying a SPAC before it announces its deal. That's why I like owning the other two Chamath [Palihapitiya] SPACs, [Social Capital Hedosophia Holdings Corp IV] and [Social Capital Hedosophia Holdings Corp VI], because they haven't announced a deal yet, that's somewhat of a lottery ticket element. It's like a lottery ticket with a floor, if it doesn't work out you get your $10 back.

Moser: Yeah.

Frankel: The odds are in your favor, I think. But having said that, I like the deal structure and I think the market is really under appreciating the value of it. Now it's more of a value investment than a lottery ticket. I'm excited about it, but for a very different way. Like you said, that sum of the parts, just my back-of-the-napkin calculation is roughly $30 a share. It's trading for about $23, so do the math. It's going to take a little while to realize that value. Creating an entirely new type of company like the SPARC that Ackman wants to create, it's not going to happen tomorrow.

Moser: No.

Frankel: Even after it happens, it could be years until investors actually realize some value. For patient investors there could be a lot of value in the approach. I consider myself an ultra long-term value investor. Now I'm excited about it for different ways. I wouldn't say I'm more or less excited, but it just suddenly became a different type of investment.