Donald Trump’s planned social media platform is to float in New York after a merger was agreed with special purpose acquisition company (SPAC) Digital World Acquisition Corp (DWAC).
The former US president’s Trump Media & Technology Group said overnight it signed a merger agreement with DWAC, sending its shares rocketing over 300% higher to $45.5 by the close.
Subject to regulatory and stockholder approval, the deal could value the combined business at up to US$1.7bn, Trump Media & Technology said. This is based on an initial enterprise value of US$875mln and a potential US$825mln from additional shares “depending on the performance of the stock price post-business combination”.
Trump Media & Technology Group said its mission and the launch of its ‘TRUTH Social’ social media app is “to create a rival to the liberal media consortium and fight back against the ‘Big Tech’ companies of Silicon Valley”.
It also intends to launch a subscription video on demand service, called TMTG+, “which will feature ‘non-woke’ entertainment programming, news, podcasts, and more”.
“I created TRUTH Social and TMTG to stand up to the tyranny of Big Tech,” said former President Trump, who holds the role of chairman of the company.
He added: “We live in a world where the Taliban has a huge presence on Twitter, yet your favorite American President has been silenced. This is unacceptable. I am excited to send out my first TRUTH on TRUTH Social very soon.
“TMTG was founded with a mission to give a voice to all. I’m excited to soon begin sharing my thoughts on TRUTH Social and to fight back against Big Tech. Everyone asks me why doesn’t someone stand up to Big Tech? Well, we will be soon!”
DWAC chairman Patrick F. Orlando, a former trader and director at Deutsche Bank (NYSE:DB) and JPMorgan, said DWAC’s US$293mln of cash should “fuel TMTG’s scale up, including to provide world class leading technology services to build strong and secure social networks and diverse media offerings”.
“Given the total addressable market and President Trump’s large following, we believe the TMTG opportunity has the potential to create significant shareholder value,” he added.
Scott St. John, executive producer of ‘Deal or No Deal’ and ‘America’s Got Talent’, has been named as the leader of TMTG+ corporate operations.
The company promised that the TRUTH Social network is currently available for pre-order in Apple’s App Store ahead of a planned Beta launch for invited guests in November and full rollout in the first quarter of 2022.
“Donald Trump + social media + SPAC. It feels like a kind of reassuringly volatile mix,” said analyst Neil Wilson at Markets.com. “Banned by Twitter and Facebook, Trump is taking on the Silicon Valley elite and fake news in the way he knows best.”
Analysts at Rabobank said: “One can argue the last thing needed in a deeply polarised America arguing over social justice, and not sure about its way, is another social media platform – for Trump.
“Those thinking that way can be reassured that perhaps it will fizzle out, or the 400% surge in the shares of the SPAC controlling TRUTH is a grubby money grab with no viable tech.
“However, Facebook is accused of manipulating news feeds; Twitter openly suppresses news and bans people – just a year ago, it blocked the Hunter Biden’s laptop story, as did most of the mainstream media; YouTube gets to decide what scientists get to say about science; and Instagram just removed a post stating scientific fact. Are we really in ‘safe hands’ at present? Is truth capable of emerging?”