Handling Completed SPACs

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MangoMan
MangoMan Member ✭✭✭
in Investing (Windows)
SPACs or Special Purchase Acquisition Companies are a growing trend. I am trying to figure out the best way to do the Register entry for the new company (name and symbol) when the SPAC completes. This can also include the distribution of associated Warrants.

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  • Quicken_Tyka
    Quicken_Tyka Alumni ✭✭✭✭
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    Hello @MangoMan

    Thank you for taking the time to visit the Community to ask your question although I apologize that you have not received a response.

    As the ability to track SPACs is not readily available, this will need to be tracked manually. Hopefully, another member with personal experience will be able to provide some insight.

    In the meantime, the general answer would be to add a manual brokerage account and add manual security and manually enter a price history if applicable.

    You would then need to use the available investment transaction types to best recreate what has occurred with these SPACS.

    I hope this helps!

    -Quicken Tyka
    ~~~***~~~
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
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    Tell us more possibly with a specific example for you.  I see from the investopedia article on same that Pershing Square Tontine Holdings is significant SPAC.  Using PSTH and PSTH' (for the warrants?) I don't see a particular difference from any other security that Quicken might handle.  What are you looking for? 
  • Greg Hill
    Greg Hill Member ✭✭
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    So, let's take Pershing Square as an actual example. (Symbols used are those used by TD Ameritrade.)

    I bought the SPAC with the symbol PSTHU and recorded it in Quicken. I have now had the stock (PSTH) and the warrants (PSTH WS) delivered and want to know how to fix things up. So, PSTHU needs to be replaced with PSTH/PSTH WS.

    One way that seems to work is to use the "Corporate Name Change" function to convert PSTHU to PSTH. That preserves the number of shares, the original cost basis and the original purchase date.

    To record the warrants, use the "Buy - Shares Bought" function to add the warrants for zero cost since there's no way to know how to value the warrants, and, at the time of issuance, they truly have a value of zero. This also is an easy way to record the correct number of warrants since they are usually issued at a 1:3 or 1:5 ratio in my limited experience. So, in the case of PSTH WS, I'd record the purchase of 1/3 the number of shares of PSTH/PSTHU rounded down to the nearest whole number.
  • Greg Hill
    Greg Hill Member ✭✭
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    As a correction to the last post: the exchange ratio of PSTH is 1:9 instead of 1:3.

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