A photo of wooden blocks that say SPAC on a folded newspaper.If history in finance and the stock market repeats itself, then my last article on Pershing Square Tontine Holdings (NYSE:PSTH) back in March deserves credit for mentioning “This is a SPAC that represents the unknown. That’s exciting — and cause for concern.” A few months later and PSTH stock is making headlines, but unfortunately not good ones.

When I wrote that article on PSTH stock, its price closed at $28.40. It had a 52-week high in February at $34.10. I think this sell-off as of March is fully justified. After all, Pershing Square Tontine differed from most SPACs by pricing at $20 and not $10. Without revenue, any price above $20 suggested an overvalued stock with high risks. So it makes complete sense now that the current price of PSTH stock hovers around $20. But there are others reasons for the selloff in PSTH stock too. Let’s get into them.

For a while, Pershing Square was in negotiations with Vivendi (OTCMKTS:VIVHY), the owner of Universal Music Group, to buy a stake in the company. But the deal fell through. The reason behind this failed attempt was explained in a letter to the shareholders. What stopped this merger was the SEC.

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