Digital World Acquisition Corp (DWAC), the special purpose acquisition company (SPAC) poised to take former US President Donald Trump’s social media platform public, is reportedly on the verge of finalizing a $50 million financing arrangement.
According to sources familiar with the matter cited in a Reuters report, the financing deal, structured around convertible notes, is anticipated to be formally announced in the coming days. This funding is expected to play a crucial role in supporting DWAC as it navigates the final stages of its merger with Trump Media & Technology Group (TMTG), the entity behind the highly anticipated social media platform Truth Social.
Following news of the impending financing deal, DWAC shares experienced a notable uptick, closing 4.4 percent higher at $47.66. The surge in stock price marks a substantial threefold increase since January 15, coinciding with Trump’s triumph in the Iowa caucus, as investors speculate on the potential impact of his return to the political sphere, which could potentially enhance the value of Truth Social.
Several investment firms, including Anson Funds, All Blue Capital, and Mangrove Partners, have reportedly shown interest in acquiring the convertible notes, underscoring the significant interest within the financial community regarding the venture.
The merger journey between DWAC and TMTG has been fraught with challenges and regulatory scrutiny. Initially, DWAC had announced a $1 billion private investment in public equity (PIPE) transaction, which was subsequently scrapped. Facing delays and regulatory hurdles, DWAC revised its agreement with TMTG in August 2021, granting Trump additional shares in DWAC with augmented voting rights.
The company has encountered investigations from both the US Department of Justice and the Securities and Exchange Commission (SEC), resulting in changes to its leadership and board composition.
Despite these obstacles, DWAC remains committed to the merger process, with plans to utilize $10 million from the $50 million convertible note raise immediately, with the remainder reserved for the completion of the merger with TMTG.
The journey to finalizing the merger has been protracted, with DWAC initially failing to meet the September 2022 deadline. A crucial amendment to the deal led to the dissolution of the PIPE and conferred Trump with additional shares carrying enhanced voting privileges. Presently, DWAC awaits SEC clearance to enable shareholder voting on the merger with TMTG, demonstrating the company’s resilience and determination to see the transaction through to completion.
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