SPAC-linked SPAC calls for Wall Street support | Donald Trump News

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Day traders and Reddit fans pushed for a spectacular rally of Digital World Acquisition Corp shares, which reached $ 94.20 last month, before recently trading at around $ 60.
The white check company linked to Donald Trump’s new media business has already won the support of retailers who have raised their stock by almost 500%. Now, large Wall Street investors are getting another chance to pile on, even as some financial companies have moved away from doing business with the former U.S. president.
Digital World Acquisition Corp. has begun organizing meetings with potential investors for a private equity investment or a PIPE transaction to help it join the Trump Media & Technology Group, according to people with knowledge of the subject. Although the terms of the PIPE have not been determined, it could be more than $ 500 million, one person said, and asked not to be named because the interviews are private.
Any new capital would add more funding to launch a media conglomerate that initially plans to launch a social network called Social Truth, which would give Trump a platform after Facebook and Twitter were banned. PIPEs help give credibility to mergers of special-purpose purchasing firms, and can provide a cash buffer if early investors decide to repurchase their shares.
Traditionally, PIPEs are priced at $ 10 per share, in line with the initial public offering price of most SPACs. But day-to-day traders and Reddit fans have helped promote a spectacular Digital World stock rally, which closed at $ 94.20 last month, before selling for about $ 60 recently. In the wake of these gains, any PIPE is expected to be priced at more than $ 10, according to a person familiar with the subject.
Profit-making opportunities can attract investors, especially if a Trump PIPE deal is structured similarly to the capital injection that helped Lucid Motors, an electric vehicle manufacturer, join Churchill Capital Corp. IV, in that transaction Lucid Group Inc. Which created the PIPE investor. he signed for $ 15 a share, closing the paper before securing a high profit of $ 52.94. Despite the ups and downs in the months that followed, Lucid has so far paid off thanks to these investors, who sold for $ 47.61 on Monday from 3:15 p.m. in New York City.
A representative of the Digital World declined to comment, while a Trump Media spokesman did not immediately respond to the request for comment.
The two entities said last month that the merger agreement valued the combined company at $ 875 million, including debt, with the option to make a profit that is double that company’s value, which is $ 1.7 billion. Truth Social’s growth plans – which will launch in beta this month and open in the U.S. in the first quarter of 2022 – will initially be funded with $ 293 million in trust from SPAC, they said at the time.
Digital World said in another dossier that it has the ability to raise a PIPE, and that it may be a “reasonable request” to Trump Media’s top management to participate in investor meetings and roadshows. But Trump himself may not be on the entire roadshow to the PIPE deal, said one person familiar with the matter.
Some Wall Street coverage funds have already moved away from the Digital World. Boaz Weinstein’s Saba Capital Management quickly left the entire stake in SPAC’s unlimited shares when it learned of its deal with the Trump entity. Lighthouse Investment Partners and DE Shaw & Co. also sold shares.
“Many investors are asking tough questions to incorporate their values into their work,” Weinstein said at the time. “For us, this was not a close call.”
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