Digital World Acquisition, the SPAC taking Donald Trump’s media company public, today in a regulatory filing disclosed the 48 investors in Digital World’s $1 billion PIPE. The investors include a mix of mostly hedge funds, with a few VC firms as well. An entity called Truth SPC owns 11.35 million shares, the largest stake among the PIPE investors.
It is unclear whether Truth SPC is related to or part of Truth Social, Trump’s social media platform, or Trump Media and Technology Group (TMTG) — the entity merging with Digital World. Truth SPC shares are under the control of one Nathan Smith with a Kentucky P.O. box, according to the filing.
The PIPE shares are to be registered before the SPAC’s shareholders vote on the deal, according to an earlier regulatory filing. This effectively means more than a billion dollar’s worth of the merged company’s stock would be immediately tradeable when the deal closes. Most PIPE deals are structured so the shares are not registered until after the merger close, which results in a lock-up period impacting the PIPE investors. Not so with Digital World.
Coverage of risk factors, including Trump’s reputation, is extensive in the filing. One item stands out: “TMTG’s management team may not successfully or efficiently manage its transition to being a public company.”
To the extent social media users prefer a platform that is not associated with Trump, “our ability to attract users may decrease,” the filing states. “Failure to attract a sufficient user base would adversely affect TMTG’s business prospects.”
Earlier regulatory filings from Digital World have outlined Trump’s business track record in detail, noting multiple bankruptcies and the many failed companies bearing his name.
The list of PIPE investors begins on page 123. Read more.
