Donald Trump’s plan to take revenge on Big Tech and make billions by launching his own social media empire and making it public was going to be a long one. And as long as he’s not dead yet, obstacles pile up.
For starters, Trump Media
But the plan is to never get TruthSocial straightened out through its boots, making its way into any source of revenue it can raise. From the beginning, the fledgling media activity announced last September, Trump’s goal has been to bring the entire operation to the stock market, where (theoretically) large sums of cash can be obtained from investors. But Trump’s poisonous reputation after Jan. 6 made it harder; In the wake of the uprising, several monetary institutions broke ties with him, liquidated his bank accounts, and gave up all loans. In the absence of major banks backing an initial public offering, Trump turned to what’s known as a PSPC: a special offer. destination acquisition company or a blank check company: to make TMTG public. The concept is to merge your company with a company that is already public, but has no activity to talk about. But it also gives a lot of opportunities for the deal to get in trouble, which turns out to be falling apart now.
Last September, Trump announced that TMTG would merge with Digital World Acquisition Corp (DWAC), a PSPC company that had gone public and was looking for a partner. After the proposed deal was revealed, DWAC’s percentage value exceeded $97. fell below $30, where it is located lately. The deal, which generated so much enthusiasm at first, had to be made temporarily. Like the top PSCS, DWAC has regulations in its corporate charter that clarify that the company’s founders will have to seek a merger partner or recover the cash it raised from investors. The deadline for DWAC to complete its merger with TMTG is September 8.
DWAC’s founders have asked investors to approve an extension of that deadline, and on Sept. 6, shareholders will be able to vote to give the company another year to close the deal. There is no guarantee that investors will approve of the extension of the term, maximum would probably lose cash if the company was forced to close and recover the budget it raised when it was made public.
Even if shareholders accept the founder’s request, the SEC case in which DWAC asked its shareholders to extend the deadline is fraught with more obstacles to negotiating.
For starters, as the document makes clear, the September 6 vote will only expand DWAC’s ability to merge with TMTG; TMTG will also have to approve an extension. And then there are the PIPE investors. Under the PSPC process, giant money players, such as hedge funds, personal equity firms, or banks, can make significant investments called PIPE investments. corporate after the merger. But, according to DWAC’s message to shareholders, those PIPE investors can begin withdrawing their cash on September 22 if the merger has not taken place. just came out.
The most important thing holding back the merger right now is the fact that DWAC is under investigation through several federal regulators. corporate. It was not intended that there would be any coordination in advance with a company like TMTG to come up with a plan to bring the two corporations closer together. These discussions and this agreement were only intended to take a stand after the DWAC was made public on September 23, 2021. The Securities and Exchange Commission and the Financial Industry Regulatory Authority are investigating whether there were indeed discussions between Trump’s camp and the DWAC before the DWAC left. Both corporations have denied wrongdoing.
As long as this investigation drags on, the DWAC told investors, the merger will take place.
But that’s not all! Along with all those grim odds that teams will derail the entire deal, the DWAC also warned investors that Trump’s declining popularity may hinder a deal’s success.
“The fate of the business combination depends in part on the popularity of the TMTG logo, as well as the reputation and popularity of its president, President Donald J. Trump,” say the most recent documents filed through DWAC. “The price of TMTG’s logo may decline if President Trump’s popularity suffers. Adverse reactions to publicity about President Trump, or the loss of his services, can have a negative effect on TMTG’s revenue, the effects of operations and its ability to maintain or generate a client portfolio, as well as the bottom line of the proposed business mix.
Although some TruthSocial users say they like the platform, the truth is that there are not many of them. Even though the platform has been busy since the FBI raid on Mar-a-Lago, with Trump spreading angry messages (and republishing QAnon propaganda), it’s simply not a thriving site. There are massive riots with content moderation, with accusations that the company is the same “fade the shadow” tactic that Trump ridiculed Twitter for allegedly opposing conservatives (the company denies doing any kind of shadow ban) and massive amounts of freely posted violent content. In fact, the platform’s disorders moderating all this violent content led Google to say on Tuesday that it would continue to exclude TruthSocial from its app store.
The big problem, which DWAC pointed out in its discussion of risk, is that many other people simply need nothing to do with Trump or TruthSocial.
According to The Hill, only 30% of respondents would use a social network related to President Trump. In addition, according to a poll published in the New York Post, only 60% of Republicans would use such a platform,” the DWAC dossier says. “To be successful, TMTG will want millions of those other people to sign up and use the TMTG platform as normal. “
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