2023-07-21 09:07:00
Trump Media and Technology Group (TMTG), created in February 2021, might soon go public. It has been two years since the media group, which houses Truth Social, has been seeking to merge with the listed company Digital World Acquisition Corp (DWAC) to be able to rally Wall Street.
DWAC is a Spac. Introduced on the stock market without commercial activity at the start, these companies attract investors who constitute a financial windfall. In September 2020, DWAC had thus recovered 293 million dollars (259 million euros) when it arrived on Wall Street.
An injection of fresh money to the tune of more than a billion dollars in the event of success
These funds are then brought, through a merger, to a startup or an existing company in search of financing. This financial package makes it possible to project itself more quickly on the stock market, since it offers greater simplicity of the procedures, as well as generally lower expenses compared to traditional IPOs. 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.
Many twists
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.
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. 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 regarding the nature of its ties to TMTG.
Nothing is won yet
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.
TMTG, Trump’s response to being banned from Facebook and Twitter
After being banned from Facebook and Twitter – Elon Musk has since lifted the sanction – in January 2021 following the assault on Capitol Hill in Washington, Donald Trump announced the creation of Truth social. To support this initiative, the former president created TMTG, a company whose objective is to ” fight big tech “. Driven by interest from retail investors, Spac’s stock soared following the announcement of its merger with Donald Trump’s company, rising from around $10 a share to a peak of $175 in two days.
(With AFP)
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