Digital World Acquisition, the SPAC that has been trying for more than two years to take Donald Trump’s social media company public, today updated the status of its PIPE reduction. The private investment originally stood at $1 billion, although delays in closing the merger caused some investors to pull out more than a year ago.
Then, in October, the SPAC announced it was working to eliminate the PIPE altogether. Both Digital World and Trump Media & Technology Group presented this news as a positive development, which raised eyebrows among many observers.
The PIPE investors had the right to terminate their subscription agreements at any time if the deal had not closed by Sept. 20, 2022. Some of the original PIPE investors pulled out a year ago, taking $138.5 million with them out of the initial $1 billion.
In the latest regulatory filing, the SPAC said between Nov 2-20 it received termination notices from investors representing approximately $17.5 million of the PIPE. As a result, together with previously reported terminations, approximately $484.5 of the PIPE has been cancelled. Digital World said management will continue to work with the PIPE Investors to unwind the remaining balance.
Cancellation of the PIPE would leave Digital World with its approximately $308 million cash in trust, less about $39 million in anticipated expenses connected to the Trump Media deal. That would supply Trump’s company with about $269 million at closing — quite a plunge from the $1.2 billion at deal announcement. Read more.
