So I’m going to try to go over what the PSTH pr means as simply as possible, because it’s an extremely complex deal and the market does not like complexity. So, here goes nothing:
1) PSTH and UMG are not one company now. Rather, PSTH is purchasing UMG shares when they begin trading in Europe, and then giving them to the PSTH shareholders. They will be worth about $14.75 each. This satisfies the SPAC conditions, and so PSTH does not need to rush to merge with an actual company. Rather, each PSTH holder will own 1 share of UMG at $14.75 and 1 share of PSTH at $5.25. This is just what the shares are “worth” and not what they will actually be trading at. I cannot tell you what they’ll be trading at because I am not a psychic.
2) PSTH will continue to search for a company to merge with with about $1.5B left in their trust value. There is no time limit in this because their SPAC conditions were already satisfied. The deal could happen next week, or in 5 years, only time will tell.
3) Each PSTH shareholder will receive one right to purchase SPARC. These rights are exercisable at $20. The rights cannot be exercised until a merger has been completed, and they are gifted to the shareholder, so there is no opportunity cost of holding. This is important, because as SPARC is not a SPAC, there is not the traditional two year time frame to find a target.
4) For anyone unfamiliar with rights, they are familiar to options. If SPARC is trading at $30, the right is worth about $30-$20=$10. Because they cannot be exercised in this scenario until a merger is complete, you are risking no capital by waiting.
SUMMARY: I may have missed something, so let me know if that is the case, or if anyone has any other questions. Don’t be alarmed if PSTH is in the red tomorrow, as this is a very complex deal and the market does not like complexity. We just need to give it time to absorb the information.
Please ignore any typos, I did not proofread this and I’m on mobile.
Submitted June 04, 2021 at 03:32AM by Cultural_Kiwi1045 https://ift.tt/3uQIwZs
