It appears that not all things SPAC have gone by the wayside. It was announced this evening that Digital World Acquisition Corp (NASDAQ: DWACU), a special purpose acquisition company formed just last month, has found an unlikely target. The company has entered an arrangement to merge with Trump Media & Technology Group.
The transaction will see the firm, which is chaired by former US President Donald Trump, go public in a transaction that values the company at an initial $875 million, and as much as $1.7 billion depending on whether an $825 million earnout sees its conditions met. The earnout reportedly relates to the performance of the stock on a post-combination basis.
Despite the heavyweight name behind it, and at the risk of creating a few enemies, in terms of SPAC transactions, this one might just be a dud. There is no PIPE financing associated with the transaction, and the company expects to fund its growth based on DWAC’s current $293 million in trust – which is still subject to redemption, meaning there could be little funds at the time of the business combination to actually get anything meaningful done.
In making the announcement, it was revealed that Trump Media & Technology intends to soon launch a new social network, referred to as “TRUTH Social.” The new platform is reportedly available for “pre-order” in the Apple App store, with select users being permitted to join the network next month ahead of a full rollout in the first quarter of next year.
The company also comments that its mission is to “create a rival to the liberal media consortium and fight back against the “Big Tech” companies of Silicon Valley.” Commenting on the new platform, former President Donald Trump stated, “I created TRUTH Social and TMTG to stand up to the tyranny of Big Tech. We live in a world where the Taliban has a huge presence on Twitter, yet your favorite American President has been silenced. This is unacceptable. I am excited to send out my first TRUTH on TRUTH Social very soon.”
In addition to TRUTH Social, the company intends to launch a subscription based video on demand service, which will cater to “non-woke” entertainment. The operations are to be lead by executive producer of Deal or No Deal, Scott St. John.
The closing of the transaction remains subject to the approval of shareholders of DWAC. No timeline for the completion of the business combination was provided.
Information for this briefing was found via Edgar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
