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 continues its plans to go public through a Spac merger.
Trump Media and Technology Group said on Saturday it had raised $ 1 billion in private investment in public equity (Pipe) financing, but did not name any investors.
In October, the former US president announced the launch of Truth Social, a social media platform without an existing app that intends to enroll through a Spac merger in New York. The move comes as Trump remains banned from Twitter, Facebook and YouTube after the Jan.6 attack on the U.S. Capitol, and the frenzied market for Spac has cooled significantly in recent months.
Trump said, “$ 1 billion sends an important message to big tech that censorship and political discrimination must end. “
“As our track record grows, TMTG will be in a stronger position to fight the tyranny of Big Tech,” he added.
Start-up TMTG, of which Trump is president, will merge with blank check company Digital World Acquisition Corp, headed by Patrick Orlando. Spac raised $ 293 million when it went public on the Nasdaq in September and eleven hedge funds, including Saba Capital and DE Shaw, led by prominent Democratic donors, participated in the offer, according to the reports. regulatory documents.
Pipe financing for the transaction far exceeds the proceeds from Spac’s IPO and is in the form of convertible preferred shares. The conversion price is set at a discount of 20 percent from the five-day average Spac share price prior to December 1, which sets the conversion price at approximately $ 35. Digital World traded up to $ 94 per share and the hedge fund group made millions when it was first listed on the Nasdaq stock exchange.
Digital World shares have soared well above their listing price of $ 10 per share in anticipation of media firm Trump. Generally, investments in Pipe are announced at the same time as the business combination. However, because Digital World waited to raise institutional capital, it was able to take advantage of the hype to sell Pipe shares at a much higher price than the traditional price of $ 10 per share.
The Pipe’s stock price may rise or fall depending on how Digital World trades and the proceeds between the Spac and the Pipe are expected to provide TMTG with $ 1.25 billion after spending. Spac shareholders will have the usual opportunity to get their money back before the merger closes if they so request.
TMTG’s Truth Social platform currently has no apps or business plans, but describes itself as enabling conversation “without discrimination on the basis of political ideology”.