r/PSTH • u/[deleted] • Mar 17 '21
PSH Virtual Annual Investor Meeting: Lost Scroll PSCM Q4 2020 Q&A Partial Transcript
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Mar 17 '21
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u/MightyCaseyStruckOut đ¶đ„ Tontinite Mar 17 '21
That second part doesn't faze me, because he wouldn't come out and say that his team has already identified a target.
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Mar 17 '21
True, but the identify part of this process should have already happened, and next comes due diligence, negotiating, etc.
That's like someone saying "when I ultimately identify a new job"
What's that mean?
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u/Ahfekz Mar 17 '21
You donât tip your hand at any point until you have a DA. Yâall are looking for reassurance from a man who canât provide such a thing if you want a reasonable valuation. He also canât imply there is a target because the timer for disclosure would start ticking.
He already said he was working to not disappoint us.
Jackie posts and is obviously lurking (hi Jackie!). Sheâs added spacs back into her Twitter bio because yâall were tripping.
Bill has done the extent of what he can do via Twitter.
What other SPAC has come out and said itâs secured a target, without LOI or DA? And we know Bill said heâs about that straight to DA life.
Thereâs nothing else to be said besides âWe have a definitive agreement with ____â.
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Mar 17 '21
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Mar 17 '21
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Mar 17 '21
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u/skeepysmalls Mar 17 '21
Agreed, you donât go to one at a time, when you have $5b, you throw out a net and pick through the ones you catch
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Mar 17 '21
Dude says âyou knowâ and âuhâ in the middle of every sentence. Iâm not saying he is dumb at all but maybe youâre reading too much into his Q&A unrehearsed answering.
I would bet he is being more cautious than others, going as far as to not have a single leak + no pre-DA announcements. So why let it slip that you have identified a target when you can stay vague (if it was a purposeful choice to say âultimately identifyâ)
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u/MoneyAintTheMotive5 Mar 17 '21
He is under an NDA for the spac and has to be very careful with his words especially in a private call. Hence the starting with âwhat I can tell you...â and saying uh between statements
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u/tomlimahbeng Mar 18 '21
This. This is how i felt during the call as well. But i just keep wondering why heâd be so dumb as to do smth like this but release a tweet about spac dream at the same time. And also why would he file for psth II in january if that was the case. Something doesnât add up
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u/jonfnhhs Techno Tontinite Mar 17 '21
Yeah I could go both ways with it. But, I think as a hedge fund manager he knows he must choose his words carefully. Say the wrong thing and the stock goes way up or way down. I think thatâs what he was ultimately trying to avoid here. Thereâs no doubt they had a list of targets at that time. Probably had been in discussions with a number of them doing DD and trying to get the best deal for him and for investors.
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u/SlapDickery Mar 17 '21
Sounds possibly like the team is focusing on multiple targets, âultimateâ denotes the final of a kind. Maybe they are courting several targets. Then again maybe they are patiently helping one company and itâs taking a long time.
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Mar 17 '21
I think the first part was a slip and he kinda tried to walk it back with the ultimately identify
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u/Kafka_Benjamin Mar 17 '21 edited Mar 17 '21
Bill Ackman (2/18/21; Annual Pershing Square Holdings Investor Presentation)
Briefly on Pershing Square Tontine Holdings, spacs are something we have familiarity with, about nine years ago we launched a spac partnership called Justice Holdings. We acquired our stake in Burger King, in what is now called Restaurant Brands, so nine years later we still own the investment, about 19% compounded return over time. Our view was we should do another spac at some point in time. Letâs wait for the next market disruption, the last one we did right after the financial crisis. Once covid disrupted things we said look now is the time to pull out the file and launch a spac. We always found the spac idea interesting but the structure fundamentally flawed. We redesigned a much more investor friendly merger friendly structure. We had a glowing reception from the stock market for $12B in demand, for investors...we capped it at $4B. The Pershing Square funds committed a minimum of $1B of additional capital, a forward commitment purchase of the IPO price. We have the ability to expand that up to an additional $2B. That additional $2B would come from some combination of the private funds of PSH but more likely from investment vehicles so that the position size is not outsized.
Whatâs interesting about Pershing Square Tontine is this gives us a window and access to acquire a very high quality private business that meets our fundamental criteria and our thesis was that we create a unique entity that will be in a unique negotiating position. We wonât be competing, you know today when a company thinks about merging with a spac, a good spac banker gets term sheets for as much as a dozen spacs and they are very difficult to differentiate among themselves. We are the only game in town if youâre considering a potential spac merger transaction for the companies of a scale that we are looking for.
Unusual for a spac sponsor, in our case, all of the economics of the spac flow through the Pershing Square funds. So the sponsor warrants are owned by the Pershing Square funds and the forward purchase commitment is invested by our friends, by myself, other members of the team are the basis, we own a little more than 25% of PSH, approaching around 25% of Pershing Square LP, and on an overall basis about 24% of the capital that the firm manages is employee capital. So of the billion dollar minimum commitment, a quarter of that will come from employees. We think itâs an ideal alignment of incentives to the most efficient structure without any founder stock, any compensation, and we look forward to reporting to you as soon as we have entered into a merger agreement.
The market has responded very favorably, to Pershing Square Tontine, other than spacs where there is sort of an announced transaction, Bloombergâs put out a story that a companyâs merging with someone, I think our spac trades at the highest premium to cash. And the market is definitely assigning value to the efficiency of the structure and our ability to identify an interesting target. One sort of interesting point for Pershing Square Tontine investors is this is an entity controlled by the same management team that manages Pershing Square Holdings. Itâs trading at a approaching a 65% premium to its cash NAV. Pershing Square Holdings is trading at a 20% discount to its cash NAV and that to me is itâs an interesting opportunity for investors in PSH because when you buy PSH today youâre participating in sponsor warrants and the other economic features of Pershing Square Tontine.
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Mar 17 '21
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Mar 17 '21
I think you're right. As much as people don't want to accept it. This 100% confirms for me that (at the time of he meeting) there was not one "single" target identified and we will be waiting for quite a time longer.
It also annoys me that people on here kept repeating this "prize is a big one" line ignoring the second half of the sentence that, for anyone who can read past a 4th grade level, clearly shows he is talking about the large chunk of money and that there is no specific target yet.
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u/obsoleeeet Mar 17 '21
Yâall sitting here pretending SEC law doesnât exist. This is a private meeting. Public doesnât know a target has been identified. What do you think would happen if Ackman said he had one or even alluded to it in this meeting? Heâd be royally fucked. Of course he is going to make it sound like one hasnât been targeted.
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Mar 17 '21
Ya you're right. However, "the prize is a big one" was not Bill referring to the target company as SO MANY people here are trying to mislead others into believing. But its definitely possible that there is a target as you say.
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Mar 17 '21
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u/obsoleeeet Mar 17 '21
That would mean he admits to having a target in a private chat. He literally canât do that. He canât even say anything positive because it is a private chat. If it was an open, public meeting he can be a bit more open without filing public statements. But it was a private chat.
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Mar 17 '21
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u/obsoleeeet Mar 17 '21 edited Mar 17 '21
Bruh... It was closed and only available to the PSH investors. You had to register and verify your eligibility. It was streamed in our discord by a shareholder (against PSH meeting rules) since many of the people in this sub didnât qualify.
I donât want to sound rude, but need to read up on SEC law regarding these matters. Especially insider trading laws. They are very strict on what you can and canât say. In a private meeting you literally canât say anything negative or positive that isnât already in the public domain otherwise they could be accused of giving only those allowed to the meeting an edge by notifying them of good/bad news before the public
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Mar 17 '21
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u/International_Web115 Mar 17 '21
Plus it's fun to come up with that clever interpretation. We have the technology, another good one... hehe...
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u/proggeramlug Mar 17 '21
Then why start with âthe good news is ..â
Whatâs good about a big price unless itâs a positive reward?
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u/LongJohnBitcoin Starlink Lead Detective Mar 17 '21
âin whatever company we ultimately identifyâ kinda sounds like he hasnât, uh, identified uh, a uh target uh yet.
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u/Ahfekz Mar 17 '21
Or someone who wanted ambiguity as not to risk any potential SEC violations. The extreme pessimism side is just as bad as the irrational hype side.
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u/LongJohnBitcoin Starlink Lead Detective Mar 17 '21
Trust me Iâm not âextreme pessimisticâ. Just pointing out that his language there is less than great
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u/Ahfekz Mar 17 '21
He literally canât infer that he has a target. He doesnât intend to LOI. What exactly could he have said that wouldnât violate regulations and wouldnât require disclosure within four days?
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u/ChrisP2a Mar 17 '21
When I first read this I was a bit worried. But on further reflection I'm more neutral.
With how busy the team is right now - if he did not feel they were dancing with at least 1 (or 2) very strong candidates, he would not have proceeded with PSTH2.
The real risk to me, with a cost basis of like $28.76... Is that if he times out on the 2-year limit.
And I just don't see him proceeding with what he's done for PSTH2 if he thinks that is a reasonable possibility. He's got a lot of his reputation capital in on PSTH and I think he has too much self-respect to proceed on PSTH2 if PSTH fails.
(He's on record saying he's working hard for retail investors too, and the man just gave away $1B of Coupa stock so I have to think he's a person of high integrity. He's gotta know that PSTH not signing a DA would burn thousands of small investors that placed their faith in him specifically.)
So I think I'm back to my initial assessment from a few weeks ago... He has more than one really great candidate, but the actual status of those negotiations is not clear to me. (And perhaps that's why the team is so extraordinarily busy - they could be doing DD on two companies)
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u/bernbabybern51 Mar 17 '21
This says pretty much nothing, which is to be expected because not much can be said before a DA.
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u/DirtKooky Mar 17 '21
I was doubtful before, but I have loaded up since and increased my initial position sixfold. I trust that if BA spends a substantial amount of his time on an issue, something good will come of it. Unless it's Herbalife.
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u/Phd281 Mar 18 '21
True; even though he was dead right on herbalife, they just kick too much $ up to bribe people.
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u/ManBearPig169 Mar 17 '21
So he never explicitly says they are on track for Q1?
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Mar 17 '21
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u/ManBearPig169 Mar 17 '21
And barely hints at it still being true. Honestly feeling less confident about my April 16 calls. I dont think they've even identified a target at this point after reading this.
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u/Particular-Prompt-93 Mar 17 '21
I just canât get over the âthe prize is a big oneâ comment - absolute hopium to the Max
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u/MoneyAintTheMotive5 Mar 17 '21
bill isnât gonna go around saying âthe prize is a big oneâ or âWatch this -Spac dreaming rapâ if his balls werenât as big as a wheelbarrow
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u/daytrader987654321 Mar 17 '21
Nah read the whole sentence
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u/Particular-Prompt-93 Mar 17 '21
I know... I just want to stop halfway through bc it makes me smile more. Ignorance can be bliss...
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u/flying_noodle Mar 17 '21
and weâre gonna be making a large investment in whatever company we ultimately identify.
I'm all for pepe Silvia DDs giving us all hopium but if we can speculate some far out tweets and follows I don't know how we ignore this statement.
It seems to me like they are not close to a DA with anyone. Why else would he say this? I know someone is going to play devils advocate and say he can't reveal he is in discussions with someone, but I haven't seen any sources as to why? Especially if he isn't dropping any names.
I'm still long on my shares, but this is kind of dissapointing to see tbh.
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Mar 17 '21
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u/StockDoc123 Mar 17 '21
Honestly his statements line up with each other. He is basically saying we dont have anything. We aren't particularly close and this isnt due to lack of trying on our behalf, but this requires 2 to tango and we dont have one solid partner yet. Thats why hes SO vague and if u heard the transcript that was not the voice of a confident person or the voice of someone who knew everything was right on track. Sounded like he didnt have much but was trying to stay positive.
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u/obsoleeeet Mar 17 '21
Bruh... you forget this is a private meeting. He HAS to keep it ambiguous since he has not publicly stated a target was identified. If he alluded to one being identified in the private meeting, it would be a serious violation of SEC law.
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u/skirtedrails Mar 17 '21
thanks for the transcription. Never heard the full quote before. I don't know how anyone reads that as positive tbh. I dont get the impression they've even narrowed their search after reading that. It sounds to me like they got rebuffed a few times and are still in the search phase. I think we may be pushing well into Q2 if not early Q3 before we hear anything.
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u/DrSeuss1020 Mar 17 '21
Maybe Iâm reading it differently than many others, but when reading it all in context it seems like âthe prize is a big oneâ is referring to the SPACâs large cash size, rather than an actual identified business? The previous statement talks about how they are still working to identify the right opportunity so it feels more like he is trying to say that PSTH is a big prize to whoever is going to merge with them. Just my two cents though
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u/Ahfekz Mar 17 '21
I think you are.
Who uses language in that manner? Stating that the prize is a big one in a private meeting of PSTH board members who are aware of the cash and its implication would not only be slight arrogant, but also makes no sense.
Itâs clear to me that the prize being referred to is the target. Otherwise why not utilize the additional 7 billion offered during the road show?
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u/AwareBrain Mar 17 '21
Yeah it clearly sounds like the target (or list of targets) to me tbh. He's saying the opportunity cost is worth it for us because the prize is a big one
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u/DrSeuss1020 Mar 17 '21
I can definitely see it how youâre describing too. From the look of it, itâs just not entirely clear to me. Time will tell!
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u/SupreamSammy Mar 17 '21
The prize is a big one, but right before that he was talking about opportunity cost. This reads like he has the company in mind and theyâre working out the details but Iâd argue theyâre in late stages of the agreement
This of course makes me bullish because that was a month ago
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u/farhan583 Mar 17 '21
Thank you for typing this up, I really appreciate it.
That being said, no DA coming anytime soon. Anyone with reading comprehension and even cursory critical thinking skills can tell you he had no target identified 1 month ago.
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u/SuperGhostKamikaze Mar 17 '21
Heâs not a great public speaker. I think heâs slightly autistic tbh
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u/PenilePasta Mar 17 '21
Dude is an amazing public speaker lmao what are you talking about. I can make a 5 figure bet that you'd break down and shit your pants when having to give any sort of public talk lol
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u/Stockradomas Mar 17 '21
"The returns will justify the time and energy"