It appears that significant demand for the Donald Trump associated Digital World Acquisition Corp (NASDAQ: DWAC) still exists in the market. The firm this morning filed documents with the SEC indicating that the company has secured a PIPE investment in connection with its SPAC transaction.
The company has secured a total investment of $1.0 billion from certain undisclosed institutional investors, whom will make the investment via Series A Convertible Preferred Stock. The investors are to purchase each share for a figure of $1,000 per share, with the shares having an initial conversion price of $33.60 per share.
In total, the full investment is expected to convert into 29.8 million common shares. The conversion price however does have downward revisions embedded within, with such conversion price being revised to the ten day volume weighted average price of the equity, less a 40% discount, after the closing of the transaction with TMTG, if that figure is lower than the current conversion price.
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The investment comes with a number of stipulations, including that no further shares being issued by the company until 90 days after the preferred shares are registered, sold, or eligible to be sold, or, until after the one year anniversary of the closing that no PIPE investor is an affiliate of the company – the latter of which suggests certain insiders participated in the transaction. The firm also agreed to not undertake a forward or reverse split for one year after this event without prior written consent.
The arrangement will also see ARC Global Investments lose its anti-dilution rights in exchange for 744,048 Class A shares, and an equal amount of warrants that are valid for a period of five years at a price of $33.60.
Unrelatedly, the company this morning also disclosed that FINRA is investigating trading in the company that occurred prior to the transaction with TMTG being announced. The SEC meanwhile is investigating the transaction itself, with the regulator requesting documents related to meetings with DWAC’s board, identifies of certain investors, and communications between the two parties.
Both investigations are presently being labelled as “inquiries” by the company, with no determination yet being made by either regulatory agency.
DWAC last traded at $42.16 on the Nasdaq.
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.
