Irregulars Quick Take
Paid members get a quick summary of the stocks teased and our thoughts here. Join as a Stock Gumshoe Irregular today (already a member? Log in)
This macro stuff gives me a headache… and on the worst days, I feel some deep sadness about the destruction and violence, but also about the coarseness of war-related communications from our government these days. I don’t like to waste time writing about politicians and guaranteeing that I’ll be making half of you mad, no matter what, and I’m not trying to change anyone’s mind about war, peace or politics, so I’ll leave it there… but man, I find weeks like this stressful.
And I’ll really be looking forward to the market’s focus hopefully turning back to “micro” stories as Q1 earnings season starts to heat up over the next couple weeks. For now, though, we’ve got a few new tidbits to think about that impact our portfolio… and one new buy to discuss with you. And as luck would have it, these are all stories that touch somewhat on one of my favorite themes, investing in royalties — so we’ll be talking a little bit about music, gold, and oil and gas today.
Ackman Goes Back to the Songbook
Bill Ackman just made a splashy deal offer for Universal Music, and it’s probably not a coincidence that this is happening as we lead into his attempt to get the Pershing Square USA and Pershing Square Capital IPOs off the ground. He’s even talking about launching another fund, too, focused entirely on the “tail risk” kind of speculations that have really boosted Pershing Square Holdings in the past (most notably his bet on the COVID collapse that paid off big).
But the focus is on Universal Music. In what is essentially a levered stock-buyback-and-movement-of-listing offer, Pershing Square, which is a large shareholder of Universal Music Group (UMG.AS, UMGNF), has offered to use its Pershing Square SPARC Holdings vehicle to buy out UMG shareholders for €5.05 and 0.77 new, US-listed UMG shares per existing UMG.AS share.
This means, ironically enough, that the company Pershing Square tried to buy using their Pershing Square Tontine Holdings (PSTH) SPAC back in 2021… is also the company Pershing Square is trying to buy using their Pershing Square SPARC Holdings, which is a “sort of” SPAC (all the intention of a SPAC, but none of the actual capital), that Pershing Square created after PSTH had to be wound down. (SPARC holdings shares were apparently distributed to the PSTH shareholders who held on to the bitter end, …
