Former President Donald J. Trump may receive a paycheck for his own startup, and it remains unclear whether securities regulators will allow its merger with the money-rich shell corporation to continue, according to a securities filing Monday.
The long-awaited registration declaration filed by the Digital World Acquisition Corporation said the merger with the Trump Media & Technology Group is expected to be completed in the second half of the year. But the document, known as S4, says the Securities and Exchange Commission, which launched an investigation into the proposed merger last year, could “disapprove of the transaction and issue a suspension order” to block it.
Digital World has said that Mr Trump could be paid to publish streaming video on the video service at the request of Trump Media in certain circumstances. The licensing deal also does not require him to use exclusively Truth Social, Trump’s Twitter-like social media platform, and allows him to “post from a personal account related to political announcements, political fundraising or voting efforts on any site.” for social media at all times. “
If the former president does something “illegal, immoral or unethical”, it is not considered a violation of his agreement with the company, according to the documentation.
The unusual licensing deal is unlikely to allay fears that Mr Trump will return to Twitter if Elon Musk completes his deal to acquire the much larger social media platform. Mr Musk, the world’s richest man, said he would lift Twitter’s ban on Mr Trump if he acquired the company; Mr Trump said he “probably wouldn’t rejoin Twitter if he could”.
Twitter stopped Mr. Trump and threw him off the platform after the storming of Capitol Hill on January 6, 2021 by his supporters and Mr. Trump’s repeated allegations that the 2020 presidential election was stolen.
Mr Trump had nearly 90 million followers on Twitter when he was kicked off the platform. He currently has about 2.7 million followers at Truth Social, where he began publishing seriously this month.
The more immediate concern for Trump Media is whether securities regulators will allow the deal to continue, which will allow Mr. Trump’s company to gain access to up to $ 1.3 billion in cash from investors.
Mr Trump could own 73 million shares, or just under 50 percent of the voting power, on Trump Media’s common stock if the merger is completed. Digital World said in the documentation that Mr Trump will have a significant impact on the company after the merger and may be able to determine who is on board and “block issues requiring shareholder approval”.
If the deal is completed at Digital World’s current share price of $ 44, Mr Trump’s stake will initially be valued at more than $ 3 billion.
Digital World said the SEC had given him a summons to search various documents on board meetings, trading procedures and “communications and assessment of potential targets”.
The SEC is investigating whether Digital World, a special-purpose acquisition company, or SPAC went public in September 2021, as the deal with Trump Media was already under discussion.
Digital World records say SPAC was looking for more than a dozen acquisition companies when it went public. But he confirmed previous reports in The New York Times that another SPAC, controlled by Digital World’s chief executive Patrick Orlando, was in serious talks to merge with Trump Media just days before Digital World’s initial public offering.
SPAC, companies that go public in hopes of finding a private business to acquire, should not have an orderly acquisition goal during their IPO Digital World does not disclose negotiations between Mr Orlando’s other SPAC, the Benessere Capital Acquisition, and Trump Media .
In a statement earlier this year, Benessere said she “terminated” a letter of intent she signed with an unnamed social media company on September 1 because “it has not yet implemented certain key agreements” or has made its audits final.
Digital World set the price for the next day’s IPO.
Shares of Digital World rose more than 6% at the beginning of trading to about $ 44.50 per share. Although they fell 50 percent from early March, shares are more than four times higher than before the company announced its deal with Trump Media last year.
Add Comment