TMTG: New Trump social media company to go public via SPAC merger
WASHINGTON – Donald Trump announced Wednesday that he is formally launching his long-awaited new media company. Among other ventures the Trump Media & Technology Group (likely listing symbol: TMTG) will go public via a SPAC merger transaction. The new company’s plans include the launch of its own social media platform, TRUTH Social. The new TRUTH Social app is already available for pre-order on Apple’s App Store.
TMTG is currently working on an agreement to go public by merging with Digital World Acquisition Corp. (NASDAQ:DWAC), an already existing Special Purpose Acquisitions Company (SPAC). Such transactions involve a merger between the two entities, with the SPAC generally adopting the new company’s name and symbol. The new company and surviving entity – in this case TMTG – effectively “goes public.” This avoids the time, cost, expense and SEC vetting procedures involved in a standard IPO.
Fighting the socialist Narrative
The new company’s mission tracks closely with what the former president has hinted at for months. He has consistently promised to create a rival to the Big Tech and Big Media monopolies that have teamed together for years to censor and exclude writers, scholars, politicians, personalities and voices – including Trump – from expressing views that stray from the now dominant socialist Narrative.
“We live in a world where the Taliban has a huge presence on Twitter, yet your favorite American President has been silenced,” Trump said in a formal statement quoted in an Associated Press story. “This is unacceptable.”
AP: “TMTG has not set its sights low.”
“In addition to the Truth Social app, which is expected to soft-launch next month with a nationwide rollout early next year, the company says it is planning a video-on-demand service dubbed TMTG+ that will feature entertainment programming, news and podcasts.
“One slide in a TMTG presentation on its website includes a graphic of TMTG’s potential competitors, which range from Facebook and Twitter to Netflix and Disney+ to CNN. The same slide suggests that over the long term TMTG will also become a power in cloud computing and payments and suggests it will go head-to-head with Amazon, Microsoft, Google and Stripe.”
More on DWAC: The numbers
The AP states that DWAC is based in Miami, but brokerage firms list its formal contact location as San Diego. AP does provide additional financial information.
“[DWA’s] Sept. 8 IPO raised $287.5 million, according to a filing with the Securities and Exchange Commission.
“[Digital World Acquisition Corp] said it has raised roughly $293 million in cash, which it will use to grow TMTG’s ventures. Among the company’s biggest shareholders are several institutional investors, including Lighthouse Investment Partners, D. E. Shaw & Co., and Radcliffe Capital Management, according to an SEC filing.
“The deal has an initial enterprise value, a measure that takes into account a company’s total debts and assets, of $875 million, according to the release.”
Wednesday trading action in DWAC and related shares will be volatile
Trading on the NASDAQ, DWAC shares were trading at ~$14.44 per share Wednesday morning at 10 a.m. ET, up some 14% from Wednesday’s close. Associated warrants (DWACW) have jumped 684% (from $0.51 to $4.00 per warrant), and associated units (DWACU) are up 59% from Wednesday and currently trade at $16.20 per unit.
In general, warrants function like long-term options entitling the holder to acquire corporate shares at a specific price. Regarding DWAC’s units, we can define a unit as a share of stock plus an attached warrant. But in either case, if the owner does not exercise the warrant by a certain date, it expires worthless, just like an option.
Traders and investors should note that at this point, investing in this evolving entity involves a high level of risk. Given today’s news, trading in all these shares could involve highly volatility, due to political and business implications.