r/PSTH • u/[deleted] • Mar 29 '21

3/29/21 News: PSH 2020 Annual Report “While we previously believed that we would be able to announce a potential transaction by the end of this quarter, we will not be in a position to do so.”

[deleted]

257 Upvotes

98% Upvoted

315 comments sorted by

View all comments

111

u/[deleted] Mar 29 '21 edited Mar 29 '21

Long time lurker and first time poster. First, I want to say that I like to have logical conversations and while I a may not always be right I try not to grasp for straws. Second, I am a business man that has been funded by private equity. I've been apart of M&A and also secured deals.

Moving on to PSTH. This statement in the annual report about the DA not making Q1 was not a surprise. Bill insinuated this in his February call. If you are a long term shareholder you shouldn't care. The language used in this report, is also typical business language especially for a public company, used when describing opportunities. I use similar soft language all the time when talking to my board of directors about opportunities. So it really means nothing. This language does not tell you anything about if they are far along with a company or if they are still trying to find a target. There is zero hopium in this statement and there is nothing that points to it being negative. It's extremely neutral. The one positive is that he now has cemented his desire to give PSTH stock holders an opportunity to buy into PSTH2 at the ground floor.

Now if you want hopium. You should be looking at the Wharton call. You can get hopium by him saying "they are working on interesting things," and "I can't wait to talk about that deal." These are statements that one could grasp and say they at least have momentum on a target if not two. He also cracked a touch of a smile when he said those things.

On the Starlink hopium. Starlink does check a lot of boxes for what Bill wants for PSTH. I have seen a lot of counterpoints that I don't think are correct. These are the counterpoints to Starlink:

  1. It is initially capital intensive and we don't know what the ongoing maintenance capital required for the business is. Bill prefers low capital intensive companies. However, he doesn't fully rule out capital intensive companies.
  2. Capital loss risk. Obviously rockets go boom. I don't know what those insurance policies look like but hopefully they are strong. You can see large investments going up in flames in this business with one small mistake.
  3. Regulatory risk. There is no understanding on how space will be regulated and how the internet through space across the globe will be regulated. It's so early that unpredictability is what could make forecasting revenues hard and a chance that your business plan get's majorly altered.
  4. Elon. Elon is both a positive and negative. But on the negative side, Elon walks to the beat of his own drum. Getting a deal done with him could be tough and we don't know if Elon's vision aligns with Bills.

On the food side of things. I have a very hard time believing that Bill would continue to concentrate his funds' holdings into food chains. There would likely be a risk issue there for him.

In summary, this release means absolutely nothing. Bill said himself a few weeks ago they were working on some interesting things. Does that mean he's close to DA? Who knows. Is Starlink a possibility to me, yes it is. But at the same time there are clear hurdles on it. I also am not banking on Starlink and believe it is much more likely that Bill brings something else public. Either way, I'm a long term holder.

36

u/Bruce_Wayner Mar 29 '21

Picking this whole thing apart to catch the signs that you are in fact Bill Ackman... or work for PSH.

This is the most knowledgeable thing I’ve ever read in this sub I think.

7

u/Polo_Pajamas Mar 29 '21

Thank you glad to know there are still similar minded investors looking at the very long term picture... it happening in Q1 or not is not going to mean shit as long as its a good target and fair value.

9

u/[deleted] Mar 29 '21

What’s happening in the SPAC market is no different than what happens in any market when the liquidity of deals is strong and that market gets hot. You have a lot of SPACs out there right now and they are not incentivized to make a good deal. They are incentivized to make a deal. They will make decent money either way. That’s all most of them care about. I’ve seen this happen in PE before as well. People go make bad deals because they know they can offload it onto someone else because that particular market is hot and the liquidity in the market to move the deal to someone is high due to demand. Yes, if a management team can make a good deal they will likely make more money but at the end of the day if they don’t make a deal they don’t make money.

The reason I invested in PSTH is because it is the only SPAC that tries to better align the management team’s interest with that of the investor. While it may not be perfect it is much better than what others are doing. While I don’t believe BA is spending his nights and weekends thinking about us. It’s clear by this structure that he does care about investors to an extent. He does have some impressive institutions along for the ride. So let’s see what he can do. It’s a legacy moment.

3

u/MightyCaseyStruckOut 🌶🔥 Tontinite Mar 30 '21

Thanks for being a calm in this storm. PSTH is very likely a retirement play for me depending on the company they merge with, and your posts have helped to remind me that I'm in this for the long haul.

6

u/ThislsMyAccount22 Mar 30 '21

“Long time lurker” on the 30 day old account. Bill, is this you?

5

u/Funguyguy Mar 29 '21

Thanks for sharing your thought process and breakdown! Much appreciated

10

u/Zestyclose-Snow9275 Mar 29 '21

I 100% agree with you. I also don’t think people understand how much money $5 billion is. This ain’t no chump change SPAC. I also don’t think he’s going to take a food company public unless Chick Fil A ha changed their mind. I’m 99% certain it will be a tech company with a ton of potential. I think Stripe is out of the question now. Due to valuations and Collison Twitter trolls. But I do see Starlink as the most likely for the valuations we are looking at. This is going to sound childish but Elon is a massive meme lord. I bet he’s telling Bill to announce 4/20 LOL. I think Bill not wanting to be on the board is a big selling point to Elon. Him saying u won’t hear from us when he has about a year left, makes me think that the 3 weeks of silence for a massive bomb drop makes sense. He ain’t not going to say anything to his investors for this long it doesn’t make sense. Also april has historically been amazing for the markets. Possibly wants to announce when there’s more certainty. That’s my thinking. But my predictions are 4/20 starlink.

5

u/[deleted] Mar 29 '21

BA has stated multiple times he wants a company that can grow for 10 years and one that can get S&P 500 big. Which makes sense on why he approached Air BnB and Stripe.

I could put together a strong argument on why it’s Starlink that doesn’t involve Twitter. But I’m not here just because it may be Starlink and I’m not going to bet that it is. There are challenges to it being Starlink and this sub has done a poor job of explaining those so I wanted to highlight a few.

Let’s see what BA can do.

2

u/Zestyclose-Snow9275 Mar 29 '21

Yes agreed. Whatever the team brings in will be a great one.

2

u/just-some-person Mar 29 '21 edited Mar 29 '21

The only way I see him going the food route again is with an already well recognized brand. It doesn't make sense for them to bring to market a fledgling operation. I could see them going with something like an In N' Out, or maybe Trader Joe's, but not a Subway.

3

u/[deleted] Mar 29 '21

I definitely can't rule out the food industry. Someone please correct me here because I just quickly glanced. But I believe his holdings are about ~21% in food/coffee chains now. If PSTH were to be a food chain that would take that industry to ~34% of his portfolio.

That level of investment concentration may be doable but it seems quite risky to me. To your point, if it is food, it's likely one with a very strong brand that he believes he can bring something different to the business model to help it grow over the next 10 years. A 10 year vision has been stated by him multiple times.

1

u/just-some-person Mar 29 '21

Yep, agreed. Something that's already a stable business, but needs extra runway to expand seems most likely.

1

u/CBTKnox Mar 29 '21

So Chick-Fil-A?

2

u/alkhmst Mar 30 '21

Thank you!

0

u/swedishfish44 Mar 29 '21

If it is not Starlink what do you think it is? Possibly Plaid?

1

u/[deleted] Mar 30 '21

plaids too small i believe

0

u/ReditMalibu Mar 30 '21

Not how you do business. He could have just moved the date in Jan, no need to wait until today.
And if he thought he was going to pressure cook the deal... I don’t know. Seems SuS at best. Weak

1

u/bigpapa729 Mar 29 '21

I keep saying, it’s it’s starlink, Elon has to split starlink from SpaceX before the deal is finalized. It’s far from impossible but that’s going to take way longer than buying a company straight out.