Donald Trump’s social media startup raises $1 billion

Donald Trump’s social media startup has raised $1 billion from unidentified investors as the company is advancing its plan to merge and go public through Spac.

Trump Media and Technology Group said on Saturday that it had raised $1 billion in private investment through public equity (Pipe) financing, but did not disclose the names of any investors.

In October, the former president of the United States announced Launch of Truth Social, A social media platform with no existing applications, intends to go public through the merger of Spac in New York. This is because Trump was still banned from using Twitter, Facebook, and YouTube after the attack on the U.S. Capitol on January 6, and the crazy Spac market has cooled significantly in recent months.

Trump said: “US$1 billion sends an important message to large technology companies that censorship and political discrimination must end.”

“As our balance sheet expands, TMTG will be in a better position to counter the tyranny of large technology companies,” he added.

The TMTG startup, chaired by Trump, will merge with Digital World Acquisition Corp, a blank check company run by Patrick Orlando. According to regulatory documents, SPAC raised $293 million when it was listed on the Nasdaq exchange in September. 11 hedge funds including Saba Capital and DE Shaw led by prominent Democratic donors participated in the offering.

The channel financing of this transaction far exceeds the proceeds of the Spac IPO and is in the form of convertible preferred stock. The conversion price is set at a 20% discount to the average stock price of Spac’s five-day trading before December 1, which sets the conversion price to approximately $35.The transaction price of Digital World is as high as US$94 per share, and the hedge fund group Made millions When it was first listed on the Nasdaq Stock Exchange.

Due to expectations of Trump’s media risks, Digital World’s share price has soared to more than $10 per share. Usually, pipeline investments are announced together with business mergers. However, because the digital world has been waiting to raise institutional funds, it was able to use the hype to sell Pipe stock at a price much higher than the traditional $10 per share.

Pipe’s stock price may rise or fall, depending on Digital World’s trading methods. It is expected that the income between Spac and Pipe will provide TMTG with US$1.25 billion after deducting expenses. If Spac shareholders request it, they will have the usual option of recovering funds before the merger is completed.

TMTG’s Truth Social platform currently has no applications or business plans, but claims to allow dialogue “without discrimination based on political ideology.”

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