🏦 What’s the Latest with DWAC’s Financing Deal?
Reports suggest that Digital World Acquisition Corp (DWAC), the blank-check company facilitating the public debut of former U.S. President Donald Trump’s social media platform “Truth Social”, is in the midst of finalising a $50 million financing arrangement. This funding, anticipated to be announced shortly, is structured around convertible notes and aims to support DWAC as it progresses towards its merger with Trump Media & Technology Group (TMTG), the entity which holds Truth Social.
📢 How Are Investors Reacting to the News?
Following this development, DWAC shares saw a 4.4% uptick in Thursday’s trading, closing at $47.66. Prominent investment firms including Anson Funds, All Blue Capital, and Mangrove Partners are reportedly among the entities vying to purchase the convertible notes. However, the specifics of the deal, including its timing and composition, remain subject to potential adjustments.
🖼️ What’s the Background of DWAC’s Financing Efforts?
DWAC had disclosed intentions last month to raise $50 million via convertible notes, following the cancellation of a previously planned $1 billion private investment, reflecting DWAC’s ongoing efforts to secure capital amidst its merger pursuit with TMTG.
🛣️ How Has the Merger Process Progressed?
While DWAC initially agreed to merge with TMTG in October 2021, regulatory scrutiny delayed the completion beyond the initial September 2022 deadline. Subsequently, an amendment to the deal in August 2022 addressed issues surrounding the PIPE (private investment in public equity) and introduced revised terms, including enhanced voting power for Trump.
🚧 What Challenges Has DWAC Faced?
DWAC’s journey towards finalizing the merger hasn’t been without hurdles. The company has grappled with investigations from the U.S. Department of Justice and the Securities and Exchange Commission (SEC), prompting leadership changes and board reshuffles.
➡️ What’s Next for DWAC?
In September, DWAC investors granted an extension of up to one year to seal the deal with TMTG. Currently awaiting SEC clearance to proceed with shareholder voting on the merger, DWAC anticipates utilizing $10 million from the convertible note raise for immediate needs, reserving the remainder for completing the merger with TMTG.