Former President Donald Trump’s media company said Digital World Acquisition Corp. has agreed to a $1 billion investment following the combination of both companies.
Bloomberg reports Trump first announced the plan to merge with the so-called blank-check firm in October that would help enable him to regain a social media presence after he was kicked off Twitter Inc. and Facebook Inc. platforms. The new enterprise will be in operation by the first quarter of 2022 and plans to start a social media company called Truth Social.
The transaction will provide about $1.25 billion of proceeds to fund the operations of the combined entity, Trump Media & Technology Group Corp. said in the joint release Saturday, with the price conversion ratio adjusted based on the share performance of Digital World.
“$1 billion sends an important message to Big Tech,” Trump said in the statement, adding to earlier accusations of censorship and political discrimination. “As our balance sheet expands, TMTG will be in a stronger position to fight back against the tyranny of Big Tech.”
Pointing to the math for the transaction, Levine said Trump is “gonna get his money” because “retail investors and Trump political allies will pay $44 for the right to give Trump $10.”
Still, some investors have already gained from the planned deal.
Hedge fund manager Bruce Kallins just had the best month of his three-decade career after his event-driven fund, Yakira Partners, gained roughly 12% in October, far better than peers.
The fund got a big boost from its stake in Digital World following the announcement with Trump’s company. Yakira was the best performer among 67 event-driven funds tracked by industry research firm BarclayHedge. The fund’s returns were twice as high as the next best performer in the category, said BarclayHedge President Sol Waksman.
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