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Trump’s Truth Social facing a key funding deadline

www.washingtonpost.com /technology/2023/09/02/truth-social-trump-media-digital-world/

When former president Donald Trump’s media start-up announced in October 2021 that it planned to merge with a Miami-based company called Digital World Acquisition, the deal was an instant stock-market hit.

With the $300 million Digital World had already raised from investors, Trump Media & Technology Group, creator of the pro-Trump social network Truth Social, pledged then that the merger would create a tech titan worth $875 million at the start and, depending on the stock’s performance, up to $1.7 billion later.

All they needed was for the merger to close — a process that Digital World, in a July 2021 preliminary prospectus, estimated would happen within 12 to 18 months.

“Everyone asks me why doesn’t someone stand up to Big Tech? Well, we will be soon!” Trump said in a Trump Media statement that month.

Now, almost two years later, the deal faces what could be a catastrophic threat. With the merger stalled for months, Digital World is fast approaching a Sept. 8 deadline for the merger to close and has scheduled a shareholder meeting for Tuesday in hopes of getting enough votes to extend the deadline another year.

If the vote fails, Digital World will be required by law to liquidate and return $300 million to its shareholders, leaving Trump’s company with nothing from the transaction.

2 comments

  • This is the best summary I could come up with:

    When former president Donald Trump’s media start-up announced in October 2021 that it planned to merge with a Miami-based company called Digital World Acquisition, the deal was an instant stock-market hit.

    For Digital World, it would signal the ultimate financial fall from grace for a special purpose acquisition company, or SPAC, that turned its proximity to the former president into what was once one of the stock market’s hottest trades.

    Trump Media has blamed the SEC for the deal’s troubles, saying in a statement last year that the agency had worked to “sabotage” the merger for political reasons with “a bureaucratic black hole of inaction.”

    In filings dating back to its September 2021 IPO, Digital World executives said they had not participated in merger discussions with any companies when in fact they’d started speaking with Trump Media leaders months earlier, in violation of federal antifraud guidelines, the SEC said in the statement.

    Though Trump Media projected in a 2021 investor presentation that the site would have 41 million total users by the end of this year, usage estimates from Similarweb, a data firm that analyzes web traffic, suggest it is a long way from reaching that goal.

    On Aug. 24, after surrendering at an Atlanta jail on felony charges alleging he participated in a criminal conspiracy to overturn his 2020 election loss, Trump posted his first tweet in more than two years, including his mug shot.

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