The new Social Media Launch is called Truth Media as part of the Digital World transaction and will be initiated by former US President Donald Trump. The social network called Snapchat is set to debut in beta form in November and a nationwide rollout is planned for the first quarter of the year next.
As part of the full launch, the former president announced that Trump Media Technology Group (TMTG) entered into a definitive merger agreement with DWAC that will permit it to become a public-listed company subject to regulatory approval. The proposed merger values TMTG at an initial enterprise value of $875 million with potential additional earnings of $825 million in additional stock valuations for each additional share granted, for a cumulative value of up to $1.7 billion depending on the course of the transaction, it said in a press release on Wednesday.
The companies plan to operate with funds provided by the DWACs’ existing cash holdings of $293 million. Once the deal is finalized, Trump will have access to $290 million from DWAC to take over the combined company.
The company has a new app called Truth Social which will debut next month and plans a subscription video-on-demand platform called TMTG. Like Trump, DWAC plans to launch a social network next year called “Truth Social,” heavily reminiscent of Facebook.
Trump uses his name to promote other businesses such as his casinos, hotels and Trump University. His only former public company, Trump Hotels and Casino Resorts, lost money for years and went bankrupt, one of his six bankruptcies.
Spac, a so-called blank check company created to go public and raise money from investors to finance the acquisition of private companies to take its place in the market, announced Wednesday night that it plans to merge with former President Donald Trump’s new social media company. Shares in Spac, a special purpose vehicle created to finance Trump’s latest media venture, soared more than 400% after its stock market debut today, October 21. On Wednesday night, President Trump announced that he has a new company called Trump Media Technology Group (TMTG) and that he will merge it with Spac and renamed it Digital World Acquisition Company (DWAC).
Trading in the shares of SPAC, the company behind Digital World Acquisition Corp., was suspended on Thursday due to volatility but the price soared following the announcement of the merger and the launch of the former President Donald Trump’s planned social media platform. Snap shares plunged 22% after quarterly sales missed expectations, while shares of WeWork jumped on their first trading day in two years after the company had botched an initial public offering.
Shares of Digital World Acquisition Corp. (Dwac) doubled on Friday after it was announced that Spac Trump Media Technology Group will go public. Dwac was the most traded stock on Thursday on the Fidelity platform with 30,000 orders a day outperforming sales orders 3 to 1. Digital World was the most traded stock on Thursday on Fidelity platform, trading on both the New York Stock Exchange and Nasdaq under the name Consolidated Tape.
More than 470 million shares of DWAC changed hands during Thursday’s meeting, according to FactSet. When this story was published, the shares of DWAC and SPAC were nearing a record number of shares traded in one day. In the afternoon market, more than 360 million shares of DWAC, a so-called special-purpose vehicle intended to raise capital on the public market in order to buy a private company, changed hands effectively.
If existing shareholders of DWAC and SPAC are left out, they will have less incentive than ordinary people to buy shares and hold shares in a company with less valuable promises.
SPACs use the money from the IPO to put private companies on the stock exchange. Parallel rounds of financing, also known as private investment or public equity, will also be introduced, meaning that companies that merge will receive SPAC money or more from outside investors. The trick is that SPACs attract large companies that go public, and SPAC has less oversight than an IPO, which can help raise money for them and for SPAC.
SPACs have grown in popularity in the past year and have been used by Trump associates like Wilbur Ross and Larry Kudlow to fund ventures. Other celebrities such as Shaq, Serena Williams and Jay-Z have launched their own SPACs. In addition to the blank cheque issued from the company’s initial public offering and the recently announced deal with Trump, large hedge funds such as De Shaw, Highbridge Capital Management, Lighthouse Partners and Saba Capital Management are said to have large stakes in DWAC.
Today the social media platform made headlines on the stock market when it announced its merger with Digital World Acquisition Corp. Shares in SPAC soared more than 400% despite the news of Fidelity. Purchase orders for DWAC, a so-called special purpose acquisition company established to raise capital on the public market to buy private companies, exceed the sales orders on the Fidelity platform by three to one. DWAC was the most mentioned company on Thursday on the popular Amateur Trading Chat Room StockTwit, and it was also mentioned in the last 12 hours on Reddit and Wallstreetbet, a forum that competes with GameStop and AMC for most mentions.
Oct 21 (Reuters) – The deal for former. President Donald Trump to create a social media app with Twitter Inc’s TWTR.N and Facebook Inc’s FBO.N prevented him from receiving exuberant support from investors, but shares in the Shell company that backed the plan closed on Thursday with more than 350% rising that day. Digital World Acquisition Corp DWAC, a Special Asset Acquisition Company (SPAC), a Blank Check company, became the most traded stock on the Nasdaq (NYSE) and sold for $470 million during that time. The volume of more than 477 million shares on the stock exchange has prompted discussions on forums such as Reddit and so-called “memes” about the value of shares driven by retail investors that mainstream financial analysis does not support.
