Investors are worried Bill Ackman's SPAC is struggling to find an acquisition target

• Investors are getting anxious about billionaire hedge fund manager Bill Ackman finding a target for his SPAC to take public, Institutional Investor reported.
• Ackman says a deal has been in the works since November, and that the SPAC team has done its homework.
• Even so, if he can't get the transaction done, Ackman said his SPAC will move on to another target.

Investors are starting to worry Bill Ackman's blank-check company is struggling to find an acquisition target, Institutional Investor reported this week.

The billionaire hedge fund manager told investors on a Wednesday call that he will make an announcement whether his Pershing Square Tontine Holdings SPAC gets a deal done with the current target or has to move on.

The uncertaintly is making retail investors anxious. The story from Institutional Investor found sentiment was low on a "PTSH support group" page comprised of retail traders. One told the magazine that it "seems like the deal won't happen" as Ackman keeps mentioning the idea of a backup target.

His SPAC - which launched with the goal of spending $5 billion to take a private business public - started working on a transaction in early November.

"We've done our homework, we like the business, we love the management team, and we are working to complete a transaction, as I said within weeks," he said on the call, according to a transcript from Seeking Alpha.

"If we cannot get this transaction done, we will move on to target number two, and there are other interesting opportunities for us to pursue," he added.

Following Ackman's comments, shares of Tontine, which went public in July 2020 under the ticker PTSH, declined, closing out the day 1.2% lower.

According to a Monday filing with the Securities and Exchange commission, Tontine said it's "currently in negotiations with a specific business target and while substantial progress has been made, significant issues remain to be addressed before a transaction can be announced and consummated, if at all."

Several institutional investors have sold all or some of their positions in the SPAC, though its early backers are still in place. Hedge Fund Soroban Capital sold its stake of 5 million shares, Taconic Capital sold half of its 1.1 million shares, and the Ontario Teachers Pension Plan sold 4.3 million shares, though that was only part of its investment, Institutional Investor reported.

But early backers Guggenheim Capital and Baupost Group still hold tens of millions of shares in Ackman's SPAC.

On The Wall Street Journal's "The Future of Everything Festival," Ackman said he and his team found an "iconic, phenomenal, great business with a great management team that meets all of our criteria." But, the nature of the target, the complexity of the deal, and other issues have caused delays, he said, adding that the company is so attractive it will be "worth the energy and the effort."