Digital World Acquisition, the SPAC taking Donald Trump’s social media company public, rose 2.3% today after the company filed its delayed 10-K. Shares also saw a bump yesterday following reports that Fox News had joined Truth Social, the ex-president’s Twitter-like social media platform.
The SPAC has $293.25 million in trust, according to the 10-K filing, with a Sept. 8 deadline to complete the proposed merger with Trump Media and Technology Group — unless the SPAC extends the outside date to March 2023, which it may under its articles of incorporation. Digital World also has commitments for a $1 billion PIPE through the sale of 1 million shares of convertible preferred stock at $1,000 each.
The aggregate merger consideration is $875 million.
If the deal is approved, post-merger TMTG stockholders will also have a contingent right to receive up to an additional 40 million earnout shares of the SPAC’s common stock if certain rpice thresholds are met for a three-year period after the deal closes. Stockholders who control more than 10% of shares outstanding are subject to a lockup of up to six months from the closing date of the merger.
SPAC Chairman and CEO Patrick Orlando beneficially owns 1.3 million Class A shares, or 3.8% of the company’s outstanding Class A stock, as well as 5.49 million Class B shares (17.8 percent of all outstanding shares).
The filing further notes, “Although we intend to closely scrutinize the management of a prospective target business, including that of TMTG, when evaluating the desirability of effecting our initial business combination with that business, our assessment of the target business’ management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company.” Read more.
