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Trump’s social media firm says it raised $ 1 billion

 


Former US President Donald Trump attends his first post-presidential campaign rally at Lorain County Fairgrounds in Wellington, Ohio, United States on June 26, 2021. REUTERS / Shannon Stapleton

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December 4 (Reuters) – Donald Trump’s new social media firm announced on Saturday it has reached deals to raise around $ 1 billion from a group of unidentified investors as it prepares to enter the market American scholarship holder.

The capital increase, details of which were first reported by Reuters on Wednesday, underscored the former US president’s ability to attract strong financial support through his personal and political brand. He’s working on launching a social media app called TRUTH Social in at least several weeks. Read more

Digital World Acquisition Corp (DWAC.O), the blank check acquisition company that will bring Trump Media & Technology Group Corp to the stock exchange by listing in New York, has said it will provide up to $ 293 million. dollars to the partnership with Trump’s media company, taking the total proceeds to around $ 1.25 billion.

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The billion dollars will be raised through a private equity investment (PIPE) transaction with a “diverse group of institutional investors,” Trump Media and Digital World said in a statement. They did not respond to requests to name the investors.

Trump Media signed its deal with Digital World to go public in October at a valuation of $ 875 million including debt. The social media company is now valued at nearly $ 4 billion based on Digital World’s stock price at the end of trading on Friday. Trump supporters and day traders grabbed the action.

Many Wall Street companies such as mutual funds and private equity firms have snubbed the opportunity to invest in PIPE. Among the investors who participated were hedge funds, family offices and high net worth individuals, Reuters reported on Wednesday. Family offices manage the wealth of the very rich and their relatives.

Some Wall Street investors are reluctant to partner with Trump. He was banned from major social media platforms after the Jan.6 attack by his supporters on the United States Capitol over fears he would inspire further violence. The attack on Capitol Hill was based on unsubstantiated allegations of widespread fraud in last year’s presidential election.

“As our balance sheet grows, Trump Media & Technology Group will be in a stronger position to fight the tyranny of Big Tech,” Trump said in a statement on Saturday.

The deal also faces regulatory risk. Last month, U.S. Senator Elizabeth Warren asked Securities and Exchange Commission Chairman Gary Gensler to investigate the planned merger for potential violations of securities laws regarding disclosure. The SEC declined to comment on whether it plans action.

Trump Media and Digital World said the conversion price per share of the PIPE convertible preferred share transaction represents a 20% reduction from Digital World’s volume-weighted average closing price for the five trading days. until December 1, when Reuters broke the news from the capital. to augment.

If that average price drops below $ 56 within 10 days of the Digital World merger ending, the discount will drop to 40% with a floor of $ 10, the companies added. Digital World shares traded at $ 44.97 on Friday.

Trump had 89 million followers on Twitter, 33 million on Facebook and 24.5 million on Instagram at the time he was blocked, according to a presentation on his company’s website.

Investors attending the confidential investor roadshows saw a demo of the planned social media app, which resembled a Twitter thread, Reuters reported.

FIRST QUARTER DEPLOYMENT

Since Trump was removed from office last year, he has repeatedly hinted that he could run for president in 2024.

Special purpose acquisition companies like Digital World had lost much of their luster with retail investors before Trump’s deal with the media. Many of these investors suffered heavy losses after the companies that merged with the SPACs failed to keep their ambitious financial forecasts.

TRUTH Social is slated for full deployment in the first quarter of 2022. This is the first of three stages of the Trump Media plan, followed by a subscription video-on-demand service called TMTG + that will deliver entertainment, news and entertainment. podcasts, according to the press release.

In a slideshow on its website, the company plans to potentially compete with Amazon.com’s AWS cloud service and Google Cloud.

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Reporting by Juby Babu in Bengaluru and Krystal Hu in New York; Editing by Daniel Wallis and Cynthia Osterman

Our Standards: Thomson Reuters Trust Principles.

Sources

1/ https://Google.com/

2/ https://www.reuters.com/markets/us/trumps-social-media-venture-raise-about-1-billion-funds-2021-12-04/

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