Politics & Finances

Trump's Social Media Platform May Lose $1 Billion In Financing as Deal Flounders

Trump's Social Media Platform May Lose $1 Billion In Financing as Deal Flounders

Due to a delay put in place by the shell company that is seeking to merge with Donald Trump's organization, the former President's Truth Social platform may lose a $1 billion financing deal.

Last year, the now-floundering deal was agreed upon by nearly three dozen hedge funds and wealthy private investors. Per a regulatory filing, the deal is set to expire on September 20, 2022.  

According to a New York Times report, the offer is in turmoil after the shell company that is seeking to merge with Trump’s organization delayed the deadline for completing the merger by a minimum of 90 days.

The Times went on to note that the "$1 billion financing arrangement, known as a private investment in public equity, or PIPE, was intended to provide another source of financing to Trump Media & Technology Group, the parent of Truth Social, upon the completion of its merger with Digital World Acquisition Corp., a vehicle known as a special purpose acquisition company, or SPAC."

Digital World raised over $300 million in an initial public offering (IPO) in 2021, all of which was set to transfer to Trump Media following the imperiled merger. 

Investors would provide the additional $1 billion in PIPE financing “upon consummation of their business combination," according to a statement that was issued last December. 

Kristi Marvin, a former investment banker and founder of SPACInsider, spoke to the Times, explaining, “Once the PIPE termination date passes, the investors are no longer contractually bound to participate."

She went on to acknowledge that some hedge funds might might stay in the game in case the merger goes through at a later date, but those who choose to leave after September 20 will not be subject to a monetary penalty.

As of April 2022, Truth Social had approximately 513,000 daily active users.

This news comes amid a slew of legal issues for former President Trump. 

Recently, the Department of Justice released a 36-page report relating to the now-infamous August 8 FBI raid at Trump's Mar-a-Lago residence. In the document, the DoJ confirms that Trump "likely obstructed" a government investigation with intent.

Following the release of the report, Trump retained former Florida solicitor Chris Kise, who has close ties to both Governor Ron DeSantis (R) and Senator Rick Scott (R).

Previously, the Washington Post reported that the FBI executed its search warrant after "federal authorities grew increasingly concerned that Trump or his lawyers and aides had not, in fact, returned all the documents and other material that were government property, according to people familiar with the discussions."

Trump -- a divisive figure even before the now-infamous January 6, 2021 attack on the United States Capitol -- has unsurprisingly weighed in, indicating that he hopes the Bureau didn't "plant evidence" during their search.

The former host of The Apprentice is also facing additional legal problems, as he has officially appealed a recent ruling that he must hand over his personal tax records to the IRS. 

Earlier this month, the Washington DC Circuit Court of Appeals unanimously ruled that the United States House of Representatives can obtain Trump's tax records from the Internal Revenue Service (IRS).

Trump did have one recent win when a Florida judge granted a motion to bar prosecutors from using "key pieces of evidence" seized from Mar-a-Lago.

What do you think about Truth Social's funding potentially falling through?

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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