One of the market's biggest mysteries has been what Bill Ackman is planning with his SPAC - Pershing Square Tontine Holdings (PSTH  ). Ackman has one of the best investing track records over his career and has consistently demonstrated an ability to discover hidden gems whether it was uncovering a fraud with MBIA or betting on the recovery of General Growth Properties during 2009.

During the mania around SPACs earlier this year, Pershing Square Tontine climbed by more than 50% in less than a month despite Ackman remaining mum on his intentions. There were rumors that he would be bringing a massive private company like Stripe public which could be worth close to a hundred billion dollars. Some of this involved people on social media paying close attention to who Ackman was following on Twitter (TWTR  ) and the comings and goings of his jet.

The speculation ended as last week it was confirmed that Ackman is looking to take a stake in Universal Music Group public through his SPAC. Many were disappointed by the news as PSTH declined by nearly 25% on the news. The deal would have PTSH buy 10% of Universal Music Group at a valuation of $40 billion.

Currently, Universal Music Group is owned by Vivendi, a French media conglomerate with a minority stake held by Tencent (TCEHY  ). Some of Universal's most well-known artists include Taylor Swift, Lady Gaga, Kanye West, and historical acts like Queen and the Beatles.

The deal is different than traditional SPACs as shareholders of PTSH will get shares in Universal Music Group. However, Universal Music Group fits his typical investing style which is to look for companies with strong cash flow, strong management teams that have high barriers to entry.

Of course, Universal Music Group fits the bill with its slate of artists and licenses to timeless music. With the number of tech companies in the streaming market involved in an intense war for subscribers, companies with irreplaceable content like Universal Music will certainly thrive. Additionally, there's likely to be an explosion in pent-up demand with people wanting to attend live music shows over the coming months and years which should also benefit Universal Music Group.

Even after the deal, PTSH still has $1.5 billion in cash. So, the expectation is that Ackman will keep looking for another deal.