2023-07-20 23:29:40
– The horizon brightens for the IPO of Trump’s media group
A major obstacle was lifted on Thursday to the IPO of Donald Trump’s media group, which houses his Truth Social network, thanks to an amicable agreement with the American market regulator, the SEC.
Posted today at 01:29
Donald Trump.
AFP
For nearly two years, Trump Media and Technology Group (TMTG) has sought to merge with the listed company Digital World Acquisition Corp (DWAC) in order to rally Wall Street. DWAC is a SPAC, i.e. a listed company that aims to attract investors and then unite with a target company that seeks to go public.
This mechanism offers a less constraining access to the market, from a regulatory point of view, than a traditional introduction. The operation should allow the young media group of the former president to receive an injection of fresh money, up to more than a billion dollars if successful. But since the announcement of this merger, in October 2021, the file has experienced several twists, which have prevented its conclusion.
At the end of June 2022, DWAC revealed that he was the subject of an investigation by the American federal authorities, who were to submit their elements to a grand jury, with a view to a possible criminal trial. In August of the same year, one of TMTG’s founding executives, William Wilkerson, contacted the SEC’s whistleblower office to report irregularities in the merger between the two entities.
An amicable agreement
On Thursday, the SEC announced that it had reached an out-of-court settlement with DWAC, under which the company admits that it misled investors about the nature of its ties to TMTG. The founders of DWAC had thus ensured that they had no contact with a possible target company before the creation of the company. However, they had indeed had exchanges with representatives of TMTG with a view to a merger, which is contrary to the regulations.
In addition to this admission of guilt, DWAC has agreed to pay an 18 million dollar fine if the merger with TMTG becomes a reality. The news took away the uncertainty of possible SEC lawsuits and sent DWAC stock soaring, which rose more than 16% in post-wall Street electronic trading.
A sign that the conclusion is not yet certain, however, DWAC called a general meeting on August 17 to obtain from its shareholders a one-year extension of the deadline for the merger with TMTG, to September 2024.
AFP
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