Former President Trump last night announced plans to start a new media network, including a social media platform and on-demand streaming content in order to “stand up to the tyranny of Big Tech.”
The social media app appears to be the first initiative of the Trump Media and Technology Group (TMTG), which plans to list on the Nasdaq by merging with Digital World Acquisition, according to the announcement first tweeted out by spokeswoman Liz Harrington. The transaction values TMTG at up to $1.7 billion, she claimed.
The SPAC raised $250 million in a downsized IPO last month.
[UPDATE: Just before the market close today Digital World Acquisition was up nearly 400% at $46.68 after climbing as high as $52.]
Trump Media & Technology Group’s growth plans initially will be funded by the SPAC’s cash in trust, according to a news release.
The transaction values Trump Media & Technology Group at an initial enterprise value of $875 million, according to a news release, with a potential additional earnout of $825 million in additional shares depending on the performance of the stock price post-business combination. It is unclear how the valuation was determined, as the Trump Media & Technology Group has no currently available products or services — only a general description of what the company said is to come.
Neither the news release nor the SPAC’s 8-K filing include any details of what manner of stock performance would trigger an “additional earnout,” or if it would perhaps be Trump himself who benefits. There also is no mention of PIPE financing. Company leadership beyond Trump himself is not mentioned anywhere.
Digital World was formed in May by Patrick Orlando, who is CEO of SPAC Yunhong International, as well as Benessere Capital Acquisition and Maquia Capital Acquisition. He is the CEO of Benessere Capital, an investment consulting and investment banking firm he founded in Miami in 2012. None of his SPACs have completed a successful merger. Orlando had a deal signed with Giga Energy, but it was terminated last month.
Trump Media & Technology Group’s mission “is to create a rival to the liberal media consortium and fight back against the ‘Big Tech’ companies of Silicon Valley,” the news release added. TMTG is incorporated in Delaware, according to the state’s Division of Corporations, while Trump’s yet-unbuilt social media platform lists Mar-a-Lago as a business address, according to multiple news media reports.
TMTG said it intends to launch the social network under the name “TRUTH Social,” which will be sold thru the Apple App store. TRUTH Social plans a beta launch for “invited guests” in November, although the actual rollout would not occur until sometime next year.
This means Trump’s media company seeks to go public before having a product to sell. Read more.
