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Trump Media And Technology Group Corp Announce $1 Billion ‘PIPE’ Investment In Committed Capital To Fund Growing Business

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Former President Trump’s new social media company, Trump Media & Technology Group Corp. (TMTG), and its partner announced it received a commitment of $1 billion from an unidentified “diverse group of institutional investors.” 

TMTG Digital World Acquisition Corp. (DWAC) said that it received “subscription agreements for $1 billion in committed capital” would be received once TMTG and Digital World are combined.

“$1 billion sends an important message to Big Tech that censorship and political discrimination must end. America is ready for TRUTH Social, a platform that will not discriminate on the basis of political ideology. As our balance sheet expands, TMTG will be in a stronger position to fight back against the tyranny of Big Tech,” Trump said in a statement. 

“I am confident that TMTG can effectively deploy this capital to accelerate and strengthen the execution of its business, including by continuing to attract top talent, hire top technology providers, and roll out significant advertising and business development campaigns,” Digital World CEO and Chairman Patrick Orlando said.

From CNBC:

Shares of DWAC, which had been trading as high as $175 per share right after the merger was disclosed, were trading at around $44 per share on Wednesday.

Late Wednesday afternoon, Reuters reported that Trump’s new company is trying to raise up to $1 billion by selling shares to hedge funds and family offices at a price higher than its initial pre-merger valuation of $10 a share.

“Trump Media is now looking to secure a so-called private investment in public equity (PIPE) that would value Digital World shares closer to their recent price, currently hovering around $40,” Reuters reported, citing anonymous sources.

The value of DWAC shares spiked during the final 10 minutes of trading Wednesday, jumping from $38.35 at 3:50 PM to a high of $51.02 just after 4:00 PM.

Trump and Orlando issued a press release that said:

“Together, the transaction will provide estimated proceeds of approximately $1.25 billion (after deducting estimated deal expenses), assuming full delivery of the amount of cash held in trust by DWAC, to be used to fund operations of the combined entity.

“The per-share conversion price of the fully committed convertible preferred stock PIPE transaction represents a 20% discount to DWAC’s volume-weighted average closing price (“VWAP”) for the five trading days prior to and including December 1, 2021, subject to downward adjustment. 

“If the VWAP of the combined entity for the 10 trading days after the closing of the business combination (“Closing VWAP”) is at or above $56, no downward adjustment will occur. If the Closing VWAP is below $56, then the conversion price shall be adjusted to the greater of a 40% discount to the Closing VWAP and the floor price of $10.00. 

“The PIPE financing is subject to customary closing conditions, including stockholder and regulatory approval, and is expected to close upon or shortly after the consummation of the business combination.”

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