Pershing Square Tontine Holdings (NYSE:PSTH) is considered one of the hottest special purpose acquisition companies (SPACs) for 2021. The company that is sponsoring the SPAC is run by the hedge fund manager Bill Ackman. What makes this SPAC particularly interesting for some investors is that shares of PSTH stock started at a premium $20 share price.

Source: Pasuwan/ShutterStock.com

The stock is already up more than 25%. Given that the SPAC is linked to Ackman (more on that below), the spike in the SPAC’s share price is not surprising. And this comes even though Pershing Square Tontine Holdings does not yet have a target for its affection (and billions of dollars).

A SPAC is not necessarily more risky than other investment types. But the structure of the SPAC means investors will hold their shares at least until the target of the SPAC is identified. In the case of Pershing Square, Ackman has about 18 months left to find his “mature unicorn.”

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

What’s In a Name?

Make no mistake about what a SPAC is all about. As David Moadel accurately states, it’s a bet on the jockey, not the horse. And Bill Ackman is a jockey that stands head and shoulders above others.

Ackman is a well-known activist investor. I remember that his hedge fund’s short sell play in Herbalife Nutrition (NYSE:HLF) didn’t end well. But Ackman’s also had many successes.

10 of 2020’s Most Fascinating SPAC Stocks

And if you’re unfamiliar with Ackman then you should know that his hedge fund, Pershing Square Capital Management, reported its second-consecutive year of record performance in 2020. The fund had an overall return of 70.2%. That beat an already impressive 58% return the fund delivered in 2019.

So it’s only natural that there would be intense speculation regarding who the object of Ackman’s eye will be. But it seems that whoever it will be will not be his first choice?

Fear of Commitment?

I don’t know the rules of this mating dance very well. But I am somewhat amused by the fact that it seems that every time Ackman is linked to a target, the target in question issues a quick denial of the rumor.

Will Ashworth wrote that both the payment platform Stripe and Airbnb (NASDAQ:ABNB) rebuffed Ackman. And Moadel also mentioned that Bloomberg was also on the list of companies that have said no.

Maybe it’s just considered bad form to look too eager to enter into a relationship like this. It could very well be that these companies, like Airbnb, want to control their own destiny. However, my daughter enjoys The Bachelor and tells me that the “contestants” that are offered a rose generally accept.