TMTG has been planning to launch a social media platform called Truth Social and is set to go public through a merger with Digital World Acquisition
Former US President Donald Trump is set to launch a new social media platform through TMTG. (Credit: Gage Skidmore from Peoria, AZ, United States of America/Wikimedia Commons)
Trump Media & Technology Group (TMTG) and Digital World Acquisition (DWAC) have secured $1bn of committed capital through a private investment in public equity (PIPE) for their proposed merger deal.
The two firms had announced a deal worth up to $1.7bn in October 2021 to combine their businesses. The duo has now entered into subscription agreements for the PIPE investment with a diverse group of institutional investors.
TMTG, which is owned by former US President Donald Trump, has been planning to launch Truth Social, which will be a new social media platform. Truth Social is likely to be launched across the US in Q1 2022.
TMTG chairman Donald Trump said: “$1 billion sends an important message to Big Tech that censorship and political discrimination must end. America is ready for TRUTH Social, a platform that will not discriminate on the basis of political ideology.
“As our balance sheet expands, TMTG will be in a stronger position to fight back against the tyranny of Big Tech.”
The deal with DWAC, which is a special acquisition company (SPAC), will enable TMTG to go public.
Following the PIPE commitment, the proposed merger will give the enlarged social media and technology company around $1.25bn in proceeds. This will be after deducting the projected transaction expenses and assuming 100% of the amount of cash held in trust by DWAC for funding operations of the enlarged entity.
DWAC chairman and CEO Patrick Orlando said: “Our focus on delivering public shareholder value drives our decision-making and by accepting these commitments for a strategic infusion of growth capital, we believe the combined company can grow on an incredibly strong foundation.
“The liquidity that will be provided to the combined company balance sheet, in excess of the up to $293 million (less expenses) that DWAC may provide, should fortify the strategic positioning of TMTG.
“I am confident that TMTG can effectively deploy this capital to accelerate and strengthen the execution of its business, including by continuing to attract top talent, hire top technology providers, and roll out significant advertising and business development campaigns.”
The PIPE financing is conditional on stockholder and regulatory approval, and other customary closing conditions. It is anticipated to close upon or shortly following the finalisation of the merger.
In addition to the Truth Social platform, TMTG could launch a subscription video-on-demand service dubbed as TMTG+. The service is expected to bring viewers news, ‘non-woke’ entertainment programming and podcasts among others.