Highlights:
Trump Launched Trump Media & Technology Group And Unveiled Plans For Truth Social. According to the Associated Press, “The former president launched his new company, Trump Media & Technology Group, in October. He unveiled plans for a new messaging app called ‘Truth Social’ to rival Twitter and the other social media platforms that banned him following the Jan. 6 insurrection at the U.S. Capitol.” [Associated Press, 12/4/21]
Trump Was The Chair Of Trump Media & Technology Group. According to the Associated Press, “Trump is listed as chair of TMTG.” [Associated Press, 12/4/21]
March 6, 2021: DWAC Registered With The SEC. According to the Securities and Exchange Commission, Digital World Acquisition Corporation registered with the SEC on March 6, 2021. [SEC, viewed 10/3/22]
DWAC Was Created As A Special Purpose Acquisition Company (SPAC), Whose Sole Purpose Was To Take A Private Company Public. According to the Associated Press, “TMTG’s plan is to become a publicly listed company through a merger with the publicly traded Digital World Acquisition Corp., a special purpose acquisition company whose sole purpose is to acquire a private company and take it public.” [Associated Press, 12/4/21]
October 20, 2021: DWAC Entered Into A Merger Agreement With The Trump Media & Technology Corporation. According to the Security and Exchanges Commission, “On October 20, 2021, Digital World Acquisition Corp., a Delaware corporation (the ‘Company’), entered into an Agreement and Plan of Merger (the ‘Merger Agreement’) with DWAC Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of the Purchaser (‘Merger Sub’), Trump Media & Technology Group Corp., a Delaware corporation (‘TMTG’), ARC Global Investments II, LLC, a Delaware limited liability company, in the capacity as the representative for certain stockholders of the Company, and TMTG’s Chief Legal Officer, in the capacity as the representative for stockholders of TMTG. Pursuant to the Merger Agreement, and subject to the terms and conditions set forth therein, upon the consummation of the transactions contemplated thereby (the ‘Closing’), Merger Sub will merge with and into TMTG, with TMTG surviving as a wholly-owned subsidiary of the Company (the ‘Business Combination’), and with TMTG’s equity holders receiving shares of the Company’s common stock.” [SEC, 10/21/21]
DWAC Would Take Trump Media Public And Fund It For $293 Million. According to the SEC, “Trump Media & Technology Group and Digital World Acquisition Corp. (NASDAQ: DWAC) have entered into a definitive merger agreement, providing for a business combination that will result in Trump Media & Technology Group becoming a publicly listed company, subject to regulatory and stockholder approval. The transaction values Trump Media & Technology Group at an initial enterprise value of $875 Million, with a potential additional earnout of $825 Million in additional shares (at the valuation they are granted) for a cumulative valuation of up to $1.7 Billion depending on the performance of the stock price post-business combination. Trump Media & Technology Group’s growth plans initially will be funded by DWAC’s cash in trust of $293 Million (assuming no redemptions).” [SEC, 10/21/21]
December 2021: DWAC Said They Raised Roughly $1.3 Billion To Fund Truth Social Expansion
December 4, 2021: DWAC Said They Raised Additional $1 Billion For Trump Media & Technology Group Merger. According to the Associated Press, “Donald Trump’s new social media company and its special purpose acquisition company partner say the partner has agreements for $1 billion in capital from institutional investors. The former president launched his new company, Trump Media & Technology Group, in October. He unveiled plans for a new messaging app called ‘Truth Social’ to rival Twitter and the other social media platforms that banned him following the Jan. 6 insurrection at the U.S. Capitol. TMTG’s plan is to become a publicly listed company through a merger with the publicly traded Digital World Acquisition Corp., a special purpose acquisition company whose sole purpose is to acquire a private company and take it public. The institutional investors were not identified in a press release issued Saturday by Trump Media and Digital World. The money would come from ‘a diverse group’ of investors after the two companies are combined, it said. Digital World said in the release that the $1 billion is above the $293 million (minus expenses) that it may invest. ‘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,’ Digital World CEO Patrick Orlando said in the release.” [Associated Press 12/4/21]
Documents Provided By A Whistleblower Showed Trump Media’s Early Financial Backers. According to Reuters, “Ever since former U.S. President Donald Trump launched a new media company aimed at rivaling Twitter, there has been a mystery over who provided the money. Trump didn’t. So who did? Now there are some answers in a cache of documents provided by lawyers representing William Wilkerson, a former executive who filed a whistleblower claim with the Securities and Exchange Commission (SEC) against the media company and Digital World Acquisition Corp, the blank-check firm taking it public. The documents show Truth Social’s early backers include six businessmen outside of the Silicon Valley mainstream — including two executives from an oil company and a gym chain, several Republican donors, a former U.S. ambassador to Portugal and the head of a mail-order fruitcake company. The investors’ involvement in TMTG, gleaned from promissory notes dating from between May 2021 and mid-2022, provides new details on the venture which, as Reuters reported, has struggled to attract tech talent and corporate partners. The names have not been previously reported.” [Reuters, 10/28/22]
These Investors Made Up Two-Thirds Of The Financing Trump Media Raised. According to Reuters, “The $22.8 million in financing from these backers – who operate largely outside the ecosystem of venture capital investors that tech startups often tap – is part of the $38 million of debt TMTG raised since May 2021, according to SEC filings.” [Reuters, 10/28/22]
An Additional $9.4 Million Was Invested By Persons Whose Identities Were Not Verifiable. According to Reuters, “The documents provided by the whistleblower’s attorneys also include four additional promissory notes collectively worth $9.4 million from entities whose identities Reuters is not able to verify.” [Reuters, 10/28/22]
Karl Pfluger, President Of Oryx Midstream Services, An Oil Company, And Brother Of A Texas Representative, Bought In For A Total Of $9.8 Million. According to Reuters, “According to the documents, Karl Pfluger, president of Midland, Texas oil and energy company Oryx Midstream Services owned by private equity firm Stonepeak Infrastructure Partners, put in $5.3 million in December 2021 and an additional $4.5 million in March 2022. Pfluger is the brother of August Pfluger, a Republican Congressman in Texas and vocal Trump ally who first earned Trump’s endorsement in February 2020. In a statement to Reuters, August Pfluger’s spokesperson said he doesn’t have a personal investment in Trump Media & Technology Group, adding: ‘He earned the endorsement of President Trump long before the creation of Truth Social.’” [Reuters, 10/28/22]
Patrick Walsh, Owner Of Holding Company For Luxury Gym Brands, TMPL, Palm Beach Sports Clubs, And LIV, Put In $6.2 Million. According to Reuters, “Patrick Walsh, chief executive of the holding company that controls luxury gym brands including TMPL, Palm Beach Sports Clubs, and LIV, invested a total of $6.2 million between December 2021 and February 2022. He had worked with Phillip Juhan, who was the financial chief at fitness chain operator Town Sports International Holdings until Juhan left to take on the same role at TMTG, according to a May SEC filing from DWAC.” [Reuters, 10/28/22]
Bob McNutt, CEO Of A Mail-Order Fruitcake Company, Invested $100,000. According to Reuters, “Another $100,000 was invested the same day by Bob McNutt, the chief executive officer of a mail-order fruitcake company in Corsicana, Texas. McNutt is a longtime Trump supporter.” [Reuters, 10/28/22]
Kenny Trout, Trump Donor And Telecom Billionaire, Invested $4 Million. According to Reuters, “Texas telecom billionaire Kenny Troutt, a vocal Trump supporter, invested $4 million through his money manager Nicholas Merrick between May and November 2021. He donated $200,000 to the Trump campaign in 2016, and another $925,000 to Trump’s 2020 re-election campaigns, according to publicly available campaign finance data.” [Reuters, 10/28/22]
Roy Bailey, The Co-Finance Chair Of Trump’s 2020 Campaign, Invested At Least $200,000. According to Reuters, “Roy Bailey, the chief executive officer of Bailey Deason Capital Investments in Dallas, Texas and the national co-finance chairman of Trump’s 2020 re-election campaign, invested at least $200,000 between May and October 2021.” [Reuters, 10/28/22]
George Glass, Former Ambassador To Portugal During The Trump Administration, Invested $500,000. According to Reuters, “George Glass, an Oregon real estate developer and Trump fundraiser who served as U.S. Ambassador to Portugal during the Trump administration, invested $500,000 on Jan. 24, 2022.” [Reuters, 10/28/22]
December 6, 2021: DWAC Announced It Was Under Investigation By The Securities And Exchange Commission (SEC) And The Financial Industry Regulatory Authority (FINRA). According to CNN, “The shell company that is facilitating former President Donald Trump’s return to Wall Street disclosed Monday that federal regulators are investigating the deal. In October, Trump announced a new media venture that would ‘stand up to the tyranny of Big Tech.’ That new entity, chaired by the former president, agreed to go public through a merger with Digital World, a Special Purpose Acquisition Company, or SPAC. In a filing Monday, Digital World Acquisition Corp. said it received a document and information request from the Securities and Exchange Commission in early November. Among other items, Digital World said the SEC request sought documents and communications between Digital World and Trump Media and Technology Group. Digital World also said Wall Street’s self-regulator, the Financial Industry Regulatory Authority, or FINRA, is looking into trading prior to the deal’s announcement.” [CNN, 12/6/21]
May 16, 2022: DWAC Proxy Statement Said The Merger Might Be Stopped By The SEC. According to the New York Times, “A new regulatory filing by the company in talks to merge with the Trump Media & Technology Group also warned that regulators may not let the deal go through. Former President Donald J. Trump could be paid to post for his own start-up company and it remains unclear if securities regulators would allow its merger with a cash-rich shell corporation to go forward, according to a securities filing on Monday. The long-anticipated registration statement filed by the Digital World Acquisition Corporation said it anticipated completing the merger with the Trump Media & Technology Group in the second half of the year. But the document, known as an S4, said the Securities and Exchange Commission, which began investigating the proposed merger last year, could ‘disapprove this transaction and issue a stop order’ that would block it.” [New York Times, 5/16/22]
The Merger Was Stuck And Not Likely To Be Concluded Until Investigations Are Resolved. According to the New York Times, “The proposed merger has since been stuck. The deal is unlikely to go through until the investigations are resolved. Thus, Trump Media cannot access the $300 million that Digital World raised through its public offering.” [New York Times, 10/5/22]
DWAC’s CEO Discussed A Merger With TMTG In February 2021, Months Before DWAC Went Public In September 2021, A Violation Of SEC Rules Which Triggered Investigation. According to the New York Times, “In February 2021, Patrick Orlando, the main backer of Digital World and its chief executive, began discussions with representatives of Trump Media about a merger with another SPAC that Mr. Orlando controlled. The Trump social media company had been created just weeks earlier by associates of the former president after he lost the 2020 election and shortly after the attack on the U.S. Capitol by some of Mr. Trump’s supporters. The two parties later decided that Digital World was a better vehicle for Trump Media to go public, because it was planning to raise a bigger amount — $300 million — through its public offering, The New York Times previously reported. Special purpose acquisition companies are shell entities that go public first, raise money from investors and then go looking for an operating company to merge with. For many businesses, SPAC mergers provide a quicker route to the public markets than a traditional initial public offering. Digital World went public in September 2021. In its filings, the SPAC told investors that there had been no substantive deal talks with any potential target. One month later, Digital World announced plans to merge with Trump Media. Within weeks of the announcement, the S.E.C. opened an investigation into the deal, following news reports that the companies had flouted regulations by discussing a merger before Digital World went public. It’s generally against the rules for SPACs like Digital World to have a target in mind before going public. […] The failure to disclose those preliminary talks in the offering documents gave ‘the S.E.C. a rare, clear-cut case to investigate,’ said Usha Rodrigues, the interim vice provost for academic affairs at the University of Georgia and a legal expert on SPACs.” [New York Times, 10/5/22]
Federal Prosecutors Began An Inquiry After Noticing Unusual Trading Activity Right Before The Announcement Of Merger. According to the New York Times, “Also, right before the merger of Digital World and Trump Media was announced in October 2021, there was an unusual surge in trading in shares of the SPAC. Federal prosecutors began their own inquiry. Now regulators and federal prosecutors in Manhattan are both looking into the trading, as well as the potentially improper communications between the two parties.” [New York Times, 10/5/22]
Investors Associated With Rocket One Capital, Who Referred To DWAC As The “Trump SPAC” Months Before Any Merger Talks With TMTG Could Have Legally Occurred. According to the New York Times, “The insider trading investigation is focused on some investors associated with a small Miami-based venture capital firm, Rocket One Capital, that came to the deal because of Mr. Orlando. The group invested in Digital World about two months before the SPAC went public, said three people briefed on the matter. Soon after the group invested, some employees at Rocket One began to routinely refer to Digital World as the ‘Trump SPAC,’ according to two of those people and documents reviewed by The New York Times.” [New York Times, 4/2/23]
Rocket One Group Invested $800,000 Into DWAC While Receiving Thousands Of Shares And Warrants At Discount Prices. According to the New York Times, “The Rocket One group eventually invested at least $800,000 into Digital World, according to documents reviewed by The Times. In return, the group’s members got thousands of shares of discounted stock and warrants. A warrant is a security that entitles an investor to buy shares at a future date at a deeply discounted price.” [New York Times, 4/2/23]
Orlando Named Rocket One Executive Bruce Garelick To DWAC’s Board In Exchange For The Investment. According to the New York Times, “In return for its investment, Mr. Orlando agreed to put Bruce Garelick, an executive at Rocket One, on Digital World’s board. Mr. Garelick, a former hedge fund manager in Boston, resigned from Digital World’s board in the summer when the company disclosed that federal authorities had sent subpoenas seeking information about Digital World’s dealings with Rocket One.” [New York Times, 4/2/23]
Bruce Garelick Was Convicted On Securities Fraud Charges After He Was Accused Of Illegally Sharing Information That Trump Media & Technology Group And Digital World Acquisition Corporation Planned To Merge. According to the New York Times, “A federal jury in Manhattan on Thursday convicted a financial executive on securities fraud charges arising from a multimillion-dollar insider trading scheme that involved the merger of former President Donald J. Trump’s social media company with a publicly traded shell company. Federal prosecutors had charged Bruce Garelick with five counts of securities fraud and conspiracy. The authorities claimed Mr. Garelick leaked confidential information to his boss and at least one other person that Trump Media & Technology Group, the parent company of Truth Social, was getting close to announcing a merger in October 2021 with Digital World Acquisition Corporation, the shell company.” [New York Times, 5/9/24]
A Focus Of The Investigation Was Rocket One Founder Michael Shvartsman. According to the New York Times, “One focus of the investigation has been Michael Shvartsman, the Miami financier who founded Rocket One and was introduced to Mr. Orlando by a wealth manager, said two people briefed on the matter. Mr. Shvartsman then began inviting colleagues, friends and relatives to join the investor group, according to three people briefed on the matter and documents reviewed by The Times.” [New York Times, 4/2/23]
June 2021: Shvartsman And Other Investors Met To Discuss TMTG And DWAC Merger. According to the Washington Post, “In June 2021, the court filings say, Orlando went to meet with Shvartsman and other prospective investors at the Miami-area offices of Rocket One, a little-known private equity firm that had marketed itself on LinkedIn as investing in ‘fearless entrepreneurs.’ […] The meeting came one month after Orlando had signed a registration statement filed with the SEC saying Digital World had not ‘initiated any substantive discussions, directly or indirectly, with any business combination target.’ But messages included in an FBI affidavit indicate that Trump’s company was part of the conversation in the meeting. In an email shortly afterward, Garelick wrote that he and Shvartsman had talked with Orlando about the ‘future payment processing needs for the Trump Media Group.’” [Washington Post, 2/3/24]
Shvartsman Was Indicted For Money Laundering In Connection To DWAC Stocks Sales. According to CNBC, “A man already charged with insider trading related to a shell company’s planned merger with Donald Trump’s social media firm was hit with a new money laundering count in Manhattan federal court. Michael Shvartsman was also accused in a superseding indictment unsealed Wednesday of engaging in a monetary transaction in property derived from unlawful activity.” [CNBC, 2/7/24]
June 27, 2022: DWAC Executives Were Subpoenaed By Federal Grand Jury. According to the New York Times “A federal grand jury in Manhattan has issued subpoenas regarding the merger, which is also under investigation by financial regulators. The public listing of former President Donald J. Trump's social media company took a fresh blow on Monday when the cash-rich shell company merging with Mr. Trump's company disclosed in a regulatory filing that a federal grand jury in New York recently issued subpoenas to the company and its directors. The grand jury subpoenas were issued within the past week, according to the filing by Digital World Acquisition, a special purpose acquisition company, or SPAC, that announced a merger with Trump Media & Technology Group in October. After the merger, Trump Media would assume Digital World's listing and trade as a public company. The disclosure by Digital World is the first indication that federal prosecutors in Manhattan have joined in the scrutiny of the merger between Digital World and Trump Media, which has been under investigation by financial regulators for months. The investigation threatens to further delay the completion of the merger, which would provide Mr. Trump's company and its social media platform, Truth Social, with up to $1.3 billion in capital, in addition to a stock market listing.” [New York Times, 6/27/22]
TMTG Asked Congress To Investigate Why The SEC Has Not Concluded Their Investigation Of Proposed Merger With DWAC. According to Bloomberg, “In late February, Trump Media’s general counsel sent a letter asking Congress to investigate the US Securities and Exchange Commission’s review of the deal, writing that the ‘endless investigation of the DWAC-TMTG merger clearly constitutes an unprecedented attempt to kill the deal without any finding of wrongdoing.’” [Bloomberg, 3/14/23]
TMTG And DWAC Started A Pressure Campaign On The SEC To Approve The Merger. According to the New York Times, “In the meantime, Trump Media has joined Digital World shareholders in their campaign against the S.E.C. The company is accusing the regulator of playing partisan politics for not signing off on the merger. It has also said it is considering suing the commission to force it to approve the deal. Mr. Orlando also joined the campaign to pressure the S.E.C. In a recent regulatory filing, Digital World provided shareholders with the work phone number and email for the S.E.C. investor advocate in case they wanted to inquire about the review process. Mr. Orlando and his lawyers did not return requests for comment. Representatives for Trump Media and the former president also did not return requests for comment. An S.E.C. spokesman declined to comment. Digital World, in its filings, has said the many investigations could delay the deal’s approval.” [New York Times, 10/5/22]
Patrick Orlando, Former CEO Of DWAC, Was Accused Of Fraud By The SEC. According to Raw Story, “The former CEO of the firm that helped bring Donald Trump’s social media company public has been accused by federal authorities of fraud in that same deal. Patrick Orlando was accused by the SEC in Washington, D.C., federal court of making ‘fraudulent contact’ and making ‘materially false and misleading statements and omissions’ while serving as CEO of Digital World Acquisition Corp. in filings made with the commission. The SEC said Orlando lied to investors by saying his special purpose acquisition company had no specific target companies before offering investors shares.” [Raw Story, 7/17/24]
The SEC Alleged That Orlando Lied To Investors When He Said He Did Not Intend To Merge With Any Specific Company As He Had Targeted TMTG For Merger With DWAC For Months. According to Raw Story, “‘Through these publicly available filings, Orlando falsely represented that DWAC, a special purpose acquisition company ... that he controlled, did not intend to merge with any specific company and, indeed, had had no discussions or contacts with any specific company and, indeed, had had no discussions or contacts with any potential merger targets.’ Orlando, the feds alleged on Wednesday, ‘knew these statements were false because he had personally engaged in numerous lengthy discussions with representatives of Trump Media & Technology Group Corp. ..., a social media company, and because he had targeted TMTG for merger with DWAC for months.’” [Raw Story, 7/17/24]
August 5, 2022: DWAC Asked Shareholders To Delay The Merger With TMTG Until 2023 Due To Concerns, Including Federal Investigations Into The Deal. According to Forbes, “Digital World Acquisition Corp., the special purpose acquisition company planning to merge with the company behind former President Donald Trump's Truth Social platform, is asking its shareholders to delay the deadline for completing the deal until 2023, in part because of federal investigations into the transaction.” [Forbes, 8/5/22]
65% Of Shareholders Were Needed To Approve Delay Or Face Either Liquidation Or Shorter-Term Extensions Paid For By Money Being Added To The Trust. According to CNBC, “DWAC and Trump Media face a Thursday deadline to complete the merger, and the SPAC is eagerly seeking an extension. DWAC needs 65% of shareholders to approve the delay. Patrick Orlando, DWAC’s CEO, has issued a barrage of pleas to shareholders through various channels, including Truth Social, urging them to approve the extension. Non-votes are essentially counted as ‘no’ votes. Some of the SPACs institutional investors, including Lighthouse Investment Partners and Pentwater Capital Management, didn’t comment on the upcoming vote when reached by CNBC. Citadel Investment Group said the company is holding stock as a ‘market maker,’ not as a voting shareholder. DWAC has warned previously that a ‘no’ result could force DWAC into liquidation. The SPAC does, however, have built-in extensions of up to six months that can be initiated by sponsors adding money to the trust.” [CNBC, 9/3/22]
September 5, 2022: The Vote To Extend Merger Deadline Failed. According to Reuters, “The blank-check acquisition firm that agreed to merge with Donald Trump's social media company failed to secure enough shareholder support for a one-year extension to complete the deal, people familiar with the matter said on Monday. At stake is a $1.3 billion cash infusion that Trump Media & Technology Group (TMTG), which operates the former U.S. president's Truth Social app, stands to receive from Digital World Acquisition Corp (DWAC.O), the special purpose acquisition company (SPAC) that inked a deal last October to take TMTG public.” [Reuters, 9/5/22]
September 8, 2022: DWAC Postponed Conclusion Of Vote Until October 10. According to the New York Times, “Digital World Acquisition adjourned by a month an important shareholder meeting after it came up short in votes supporting a one-year extension for the deal. The cash-rich company that seeks to merge with former President Donald J. Trump’s upstart social media company is still scrambling to get enough shareholders to vote in favor of extending the deadline for getting a deal done. The company, Digital World Acquisition, threw a curveball at investors on Thursday when it adjourned by a month an important shareholder meeting that was meant to close the voting period and announce the vote tally, after it came up short in votes supporting a one-year extension. Before the adjournment, to Oct. 10, Digital World twice delayed reporting the outcome of the shareholder vote, and on Tuesday it adjourned a similar special shareholder meeting. The adjournment buys more time for the special purpose acquisition company, or SPAC, to gain more support for the extension. The company is asking shareholders to give it another year to complete the merger with Trump Media & Technology, which in February started its flagship social media app, Truth Social.” [New York Times, 9/8/22]
DWAC Received $2.85 Million From A Shanghai-Based Investment Firm To Delay The Merger Until December 8. According to the Washington Post, “Digital World — with help from its sponsor, Arc Capital, an investment firm based in Shanghai — has paid roughly $3 million to give itself until Dec. 8 to finish the merger. The company has delayed shareholder meetings three times, including earlier this week, without announcing whether it has received approval for an extension from the required 65 percent of shareholders.” [Washington Post, 10/15/22]
DWAC Extended The Merger Deadline With TMTG To June 8
DWAC Extended The Deadline To Complete The Merger With Trump Media To June 8, 2023. According to a Form 8-K filing from DWAC with the Securities and Exchange Commission, “The Company extended the date by which the Company has to complete its initial business combination from March 8th, 2023 to June 8th, 2023 (the ‘Third Extension’). The Extension is the third of four three-month extensions permitted under the Company’s governing documents and provides the Company with additional time to complete its initial business combination.” [Securities and Exchange Commission, 2/27/23]
This Was The Third Of Four Allowed Three-Month Merger Deadline Extensions. According to a press release from DWAC filed with the Securities and Exchange Commission, “Patrick Orlando, CEO of Digital World, stated, ‘As a result of the support from the stockholders which provided for up to four three-month extensions to provide additional time to continue working diligently on the potential business combination, we are happy to exercise the third of such three-month extensions.’” [DWAC via SEC, 2/28/23]
DWAC Amended Their Rules So That An Affirmative Vote Of 65% Of All Shares Was Necessary To Approve The Merger Extension Proposal. According to a 14-A filing by DWAC with the Securities and Exchange Commission, “The Company is supplementing the Proxy Statement to amend the voting standard applicable to the Extension Amendment Proposal, as defined therein, to reflect that the required vote to effect the Extension is the affirmative vote of the holders of 65% of the then issued and outstanding shares of the Company’s Class A common stock and Class B common stock, voting together as a single class. The voting standard, as amended, is both consistent with the plain language of the Company’s certificate of incorporation and market practice for an extension vote governed by similar charter language under Delaware General Corporation Law.” [14-A filing by DWAC with the SEC, 8/24/23]
Previously, Approval Required At Least 65% Of Both Class A And Class B Shares Voting Separately. According to a 14-A filing by DWAC with the Securities and Exchange Commission, “Subject to the foregoing, the approval of the Extension Amendment Proposal requires the affirmative vote of (i) the holders of 65% of the then issued and outstanding shares of each of the Class A common stock and Class B common stock, voting separately as a class, and (ii) the holders of 65% of the then issued and outstanding shares of Class A common stock and Class B common stock, voting together as a single class, in each case present and entitled to vote at the Special Meeting and voted in connection with such proposal.” [14-A filing by DWAC with the SEC, 7/17/23]
DWAC And TMTG Agreed To Extend The Deadline To Merge Until December 31, 2023. According to Bloomberg, “The blank-check firm struggling to take Donald Trump’s social media company public rallied in premarket trading after the two companies reached an agreement that pushes back one impediment to the deal reaching completion. Others still loom. The SPAC, Digital World Acquisition Corp., and Trump Media & Technology Group said they extended the deadline for their dual commitment to the merger — known as the outside date — until Dec. 31, according to a filing Wednesday.” [Bloomberg, 8/9/23]
DWAC Shareholders Approved Extending The Merger Deadline With Truth Social Until September 2024. According to the Washington Post, “Shareholders in Digital World Acquisition, the investment partner of former president Donald Trump’s media start-up, approved an extension of the company’s merger deadline, giving it more time to complete the deal, Digital World said Tuesday. The extension will give the special purpose acquisition company, or SPAC, another year to finalize its long-stalled merger with the parent company of the pro-Trump social network Truth Social.” [Washington Post, 9/5/23]
September 20, 2022: DWAC Investors Threatened To Pull $1 Billion In Additional Funding Unless Financial Terms Were Renegotiated To Shift Risk Onto Trump Side Of The Merger. According to the Financial Times, “Donald Trump and the backers of a blank-cheque company that plan to take his Truth Social media business public are scrambling to renegotiate a $1bn financing package with investors ahead of a crucial deadline for the deal. Investors who committed to provide funds to the company through a so-called private investment in public equity (Pipe) transaction are in discussions with Patrick Orlando, the chief executive of Digital World Acquisition Corporation, to secure better terms, said two people familiar with the talks. The revised agreement would shift more of the risk associated with the transaction to Trump and his backers, the people added. The $1bn deal with investors was scheduled to expire on Tuesday. If they choose to withdraw their support, Truth Social owner Trump Media & Technology Group will receive much less cash even if its planned merger with DWAC, a so-called special purpose acquisition company (Spac), goes through.” [Financial Times (UK), 9/20/22]
September 24, 2022: Following The Missed Deadline, DWAC Received Cancellation Notices For $138.5 Million In Financing. According to CNBC, “Shares of Digital World Acquisition Corp. fell this week as the company missed a key deadline to hold on to about $1 billion in financing for its proposed merger with former President Donald Trump’s media company. DWAC, which is a special purpose acquisition company, or SPAC, has been set to be the vessel to take Trump Media and Technology Group public. But the deal with Trump’s firm has run into several financial and legal obstacles. At its 2022 peak, DWAC’s stock traded at $97. Now, its share price sits around $16 as markets slide, the appetite for SPACs dries up and Trump faces mounting legal peril. The stock fell about 3% Friday. DWAC secured $1 billion in financing from private investors in public equity, also known as PIPE, which would fund Trump Media after the merger. However, Tuesday marked the expiration of these investors contractual obligations to the deal, allowing them to pull their funding. Late Friday, DWAC disclosed in a regulatory filing that, between Monday and Friday, it received termination notices from PIPE investors representing about $138.5 million of the financing. PIPE investors are given convertible preferred shares, which can be transferred into common stock at a discount. By converting and selling these shares, these investors also have the power to significantly dilute the holdings of other investors including former president Trump.” [CNBC, 9/24/22]
April 25, 2022: DWAC Lost Nearly Half Its Value After Elon Musk Announced Deal To Buy Twitter. According to CNN, “Elon Musk’s quest to become a social media mogul is dealing a blow to Donald Trump’s social venture. Shares of Digital World Acquisition Corporation, the controversial blank-check firm that plans to merge with Trump Media & Technology Group, fell 13% on Monday to close at $35.71. That’s the lowest level since the Trump deal was announced last October — and the selloff comes as Musk reaches a deal to take over Twitter, one of the Big Tech companies Trump had vowed to take on. At one point, the stock was down as much as 19%. Trump Media & Technology Group recently launched Truth Social, a Twitter clone aimed at conservatives whom Trump claims Twitter has silenced. ‘There’s no need to download Truth Social if you can get it on Twitter,’ said Matthew Kennedy, senior IPO market strategist at Renaissance Capital, which provides IPO-focused ETFs and pro-IPO research. Since the final trading day before Musk surprised Wall Street by saying he had amassed a stake in Twitter, Digital World has lost 44% of its value. The special purpose acquisition company, or SPAC, closed at $63.25 on April 1 before Musk’s announcement April 4.” [CNN, 4/25/22]
October 4, 2022: DWAC Shares Dropped 5% After Musk Proposed Completing Previous Deal To Buy Twitter. According to CNBC, “Shares of Digital World Acquisition Corp., the special-purpose acquisition company seeking to take Trump Media and Technology Group public, slid Tuesday after Elon Musk reversed course and proposed going through with his deal to buy Twitter. Shares of DWAC fell more than 5% Tuesday to $17.10. The stock’s 2022 peak was about $97 in March. Trump Media and Technology Group owns Truth Social, the platform founded by former President Donald Trump after he was banned from Twitter following the Jan. 6, 2021 Capitol insurrection.” [CNBC, 10/4/22]
August 16, 2022: DWAC Asked For An Extension To File Earnings Report After Losing $6.5 Million In Last Report. According to CNBC, “Digital World Acquisition Group, the special purpose acquisition company that plans to merge with Trump Media and Technology Group and take it public, is asking for an extension to file its earnings report, according to a regulatory filing Tuesday. In a filing with the Securities and Exchange Commission, DWAC said it expects to report within the agency's five-day grace period of the required filing date. Publicly traded companies are required to report earnings no later than 35 days after a quarter is complete. DWAC said it had a net loss of about $4.7 million and $6.5 million for the three-month and six-month periods ended June 30, respectively. It said the amounts are still under review and may differ from its reported figures.” [CNBC, 8/16/22]
August 25, 2022: A Vendor Alleged They Have Not Been Paid $1.6 Million Owed By Truth Social. According to CNBC, “Former President Donald Trump’s social media outfit, Truth Social, is locked in a bitter battle with one of its vendors claiming that the platform is stiffing the company out of more than $1 million in contractually obligated payments, FOX Business has learned. If the allegations are true, they would suggest that Truth Social’s finances are in significant disarray, people with direct knowledge of the matter say. Internet infrastructure company RightForge is said to be among Truth Social’s largest vendors and creditors, these people say. In October, RightForge announced it entered into an agreement to host Truth Social, which Trump helped create after he was banned by Twitter following the Jan. 6 riots. RightForge now contends that Truth Social has reneged on its contractually obligated monthly payments for setting up the platform’s web-servicing infrastructure, according to three people with direct knowledge of the matter. These people say RightForge contends that Truth Social has made just three payments and ceased making any payments since around March. RightForge claims that Truth Social owes it around $1.6 million and is threatening legal action to recoup the money, these people add. RightForge CEO Martin Avila declined to comment ‘on any private matters,’ but wouldn’t deny the disagreement between the two entities. He added in a statement: ‘Our founding vision is to make a second internet to support American ideas online. RightForge believes in the mission of President Trump’s free speech platform and wish to continue supporting the president in his media endeavors.’ A spokesman for Truth Social also would not deny the matter when contacted by FOX Business. A spokesman for Trump had no comment.” [CNBC, 8/25/22]
September 17, 2022: DWAC Failed To Pay A Proxy Solicitor While Trying To Get Enough Support To Extend Deadline On Merger Talks. According to the Financial Times, “Executives behind a blank-cheque company that plans to take Donald Trump’s media business public have failed to pay their proxy solicitors even as they struggle to drum up support for an extension to complete the deal. Digital World Acquisition Corporation, a special purpose acquisition company set up by Patrick Orlando, has not paid Saratoga Proxy Consulting for its work helping to rally shareholders, according to people familiar with the situation. DWAC owes the New York-based firm a six-figure sum but Orlando has informed it that there is no money to pay the bill, one of the people said. On Friday, the company announced that it had brought on a new proxy solicitor, Alliance Advisors. Orlando responded to an email sent by the Financial Times with a screenshot appearing to show a message sent to a DWAC shareholder by TD Ameritrade on September 13 saying voting had closed a week earlier and a link to its latest filing with the Securities and Exchange Commission. Saratoga declined to comment.” [Financial Times (UK), 9/17/22]
September 26, 2022: Digital World Acquisition Corporation Changed Their Address In A Regulatory Filing To A UPS Store In Miami. According to CNBC, “Digital World Acquisition Corp., the blank-check company looking to take Trump Media and Technology Group public, has changed its listed address to a UPS Store in Miami. The change from a Miami office building to a UPS address came with DWAC’s regulatory filing on Friday disclosing that some investors pulled out tens of millions of dollars.” [CNBC, 9/26/22]
DWAC Received A De-Listing Notice From NASDAQ Over Failure To Pay Dues
DWAC Received The De-Listing Notice On February 22, 2023. According to an 8-K Filing by DWAC with the Securities and Exchange Commission, “On February 22nd 2023, Digital World Acquisition Corp. received a notice from NASDAQ stating that the Company has not paid certain fees required by Listing Rule 5250(f) and that the company will be delisted unless it appeals this determination. The Company has elected to file an appeal of this matter, pay the corresponding fee, and plans to pay any fees The Hearing Department determines are due.” [Securities and Exchange Commission, 2/28/23]
DWAC Announced They Would Appeal A De-Listing Notice From Nasdaq Over Non-Payment Of Dues. According to Reuters, “Digital World Acquisition Corp (DWAC.O), a blank-check firm that is to merge with former U.S. President Donald Trump's social media platform, said on Wednesday it will file an appeal against a Nasdaq de-listing notice due to the non-payment of some dues. ‘The company has elected to file an appeal of this matter, pay the corresponding fee, and plans to pay any fees the Hearing Department determines are due,’ Digital World said in a filing. Digital World has already been facing delays in closing the deal to take Truth Social public due to investigations on whether the Trump-backed company broke securities regulations and the departure of top executives.” [Reuters, 3/1/23]
DWAC Said They Cured Their Fee Delinquency With Nasdaq And Were Now In Compliance. According to a press release from DWAC, “Digital World Acquisition Corp (NASDAQ:DWAC) (‘DWAC’ or the ‘Company’), a SPAC, today announced that they have received a notice from NASDAQ stating that the Company's fee delinquency has been cured, and as a result the Company has regained compliance with the applicable listing standard. The scheduled hearing before the Hearings Panel on April 6th, 2023, has been cancelled. The Company's stock will continue to be traded on the Nasdaq Stock Market.” [Press Release – DWAC, 3/28/23]
December 16, 2022: DWAC Unveiled A Series Of High-Level Departures. According to Forbes, “Digital World Acquisition Corp., the special-purpose acquisition company picked to take former President Donald Trump’s social media company public, unveiled a series of high-level departures on Friday since the end of last month—deepening potential worries for the firm as it struggles to finalize a deal amid regulatory investigations and broader market chaos.” [Forbes, 12/16/22]
March 2023: Trump Media Laid Off About Six People, Including Their Chief Technology Officer. According to Bloomberg, “The company behind former President Donald Trump’s Truth Social has trimmed staff while awaiting regulatory approval for a merger that offers a financial lifeline, according to two people with knowledge of the matter. Trump Media & Technology Group, Truth Social’s parent company, laid off about half a dozen people, including senior members of its ranks, such as Chief Technology Officer William ‘BJ’ Lawson, according to the people, who asked not to be identified because the information is private. Lawson was the third person to hold the role at the company. Some close to Trump Media estimate it can fund operations through September at present spending levels, according to the people.” [Bloomberg, 3/14/23]
March 2023: DWAC Fired Its CEO And Chairman Of The Board Patrick Orlando. According to a press release from DWAC, “Digital World Acquisition Corp (NASDAQ:DWAC) (‘DWAC’ or the ‘Company’), a SPAC, today announced that Eric Swider, a member of DWAC's Board of Directors (the ‘Board’) since DWAC's IPO, has been appointed interim Chief Executive Officer, effective immediately. Mr. Swider succeeds Patrick Orlando, who was terminated from his positions as CEO and Chairman of the Board after having served for the past 1.5 years. As the Board executes its succession plan, it looks forward to a fully realigned management team to best meet the challenges the Company faces. Mr. Orlando will remain as a Director on the Board.” [Press Release – DWAC, 3/22/23]
Trump Media Group Co-Founders Sued Trump And Other Leaders Alleging A Scheme To Dilute Their Shares. According to the Washington Post, “The co-founders of former president Donald Trump’s media company filed a lawsuit Wednesday, claiming that Trump and other leaders had schemed to deprive them of a stake in the company that could be worth hundreds of millions of dollars. The case could complicate a long-delayed bid by Trump Media & Technology Group, owner of the social network Truth Social, to merge with a special purpose acquisition company called Digital World Acquisition and become a publicly traded company. That merger deal, which could value Trump’s stake in the company at more than $3 billion, would offer the former president a financial lifeline at a time when he is facing more than $454 million in penalties from a civil fraud judgment this month in New York. Representatives for Trump, Trump Media and Digital World did not immediately respond to requests for comment.” [Washington Post, 2/29/24]
Lawsuits From Two Early Founders Of TMTG Threatened To Delay Merger. According to the New York Times, “A rash of lawsuits are threatening to stall a shareholder vote on the long-delayed merger of former President Donald J. Trump’s social media company and a cash-rich shell company. Two early founders of Trump Media & Technology Group have filed suit to preserve their ownership stake in the business, the parent company of the Truth Social online posting platform. The lawsuit, filed Wednesday under seal in Delaware Chancery Court by a partnership led by Wes Moss and Andy Litinsky, claims that Trump Media is trying to dilute its ownership stake in the company, of which Mr. Trump is a majority shareholder. The lawsuit seeks an expedited hearing in Delaware state court ahead of a March 22 vote by shareholders of Digital World Acquisition Corp. on its merger with Trump Media. Digital World is the special purpose acquisition company that was set up to raise money from investors in an initial public offering and to use that money to find a private company like Trump Media to buy.” [New York Times, 3/1/24]
UAV’s Attorneys Alleged That Trump Tried To “Drastically Dilute” The Partnership’s Stake By Issuing New Shares To Trump And His Associates, Which Would Water Down UAV’s Stake To Less Than One Percent. According to the Washington Post, “But UAV’s attorneys allege in the motion that Trump has recently attempted to ‘drastically dilute’ the partnership’s stake as part of what they called an ‘11th hour, pre-merger corporate maneuvering; tactic designed to increase the amount of authorized stock, from 120 million shares to 1 billion shares. UAV’s attorneys wrote that the ‘dilution scheme’ had ‘no legitimate business purpose’ and suggested that Trump and the Trump Media board planned to issue the new shares to ‘Trump and/or his associates and children,’ watering down UAV’s stake to less than 1 percent.” [Washington Post, 2/29/24]
Federal Investigators Examined Whether TMTG Violated Money Laundering Laws By Accepting $8 Million With Suspected Russian Ties. According to the Guardian, “Federal prosecutors in New York involved in the criminal investigation into Donald Trump’s social media company last year started examining whether it violated money laundering statutes in connection with the acceptance of $8m with suspected Russian ties, according to sources familiar with the matter. The company – Trump Media, which owns Trump’s Truth Social platform – initially came under criminal investigation over its preparations for a potential merger with a blank check company called Digital World (DWAC) that was also the subject of an earlier probe by the Securities and Exchange Commission.” [Guardian, 3/15/23]
Former TMTG Co-Founder Will Wilkerson Alerted Federal Prosecutors Of The Loans In October 2022. According to the Guardian, “Federal prosecutors’ interest in the two payments appear to have started when Wilkerson, through his attorneys Patrick Mincey, Stephen Bell and Phil Brewster, alerted the US attorney’s office for the southern district of New York to the payments on 23 October 2022.” [Guardian, 3/15/23]
The Investigation Threatened To Hold Up The TMTG-DWAC Merger. According to the Guardian, “The expanded nature of the criminal investigation, which has not been previously reported, threatens to delay the completion of the merger between Trump Media and DWAC, which would provide the company and Truth Social with up to $1.3bn in capital, in addition to a stock market listing.” [Guardian, 3/15/23]
TMTG Received Two Loans Wired From Obscure Entities That Appeared To Be Controlled By A Relation Of A Putin Ally. According to the Guardian, “Towards the end of last year, federal prosecutors started examining two loans totaling $8m wired to Trump Media, through the Caribbean, from two obscure entities that both appear to be controlled in part by the relation of an ally of Russian president Vladimir Putin, the sources said.” [Guardian, 3/15/23]
December 2021: The First Loan Was For $2 Million And Came From Paxum Bank In Dominica While TMTG Needed A Bridge Loan To Avoid Collapse. According to the Guardian, “The first $2m payment to Trump Media came in December 2021 when the company was on the brink of collapse after the planned merger with DWAC – that would have unlocked millions for the company – was delayed when the SEC opened an inquiry into whether the arrangement broke regulatory rules. Trump Media needed a bridge loan to keep the company afloat. But it struggled to get financing until DWAC’s chief executive Patrick Orlando sourced a $2m loan wired from Paxum Bank registered in Dominica, according to the wire transfer receipt reviewed by the Guardian.” [Guardian, 3/15/23]
Two Months Later, ES Family Trust Made An Unexpected Second Payment For $6 Million. According to the Guardian, “The wire transfer identified Paxum Bank as the beneficial owner, although the promissory note identified an entity called ES Family Trust as the lender. Two months later, an unexpected second $6m payment arrived in Trump Media’s account from ES Family Trust, the transfer receipt showed.” [Guardian, 3/15/23]
Angel Pacheco Was Both A Director Of Paxum Bank And The Trustee Of ES Family Trust. According to the Guardian, “Though the two payments to Trump Media ostensibly came from two separate entities – first Paxum Bank and second ES Family Trust – the trustee of ES Family Trust, a person called Angel Pacheco, appears to have simultaneously been a director of Paxum Bank.” [Guardian, 3/15/23]
Anton Postolnikov, Part-Owner Of Paxum Bank, Was Related To Aleksandr Smirnov, A Putin Ally And Former First Deputy Minister Of Justice. According to the Guardian, “The Russian connection, as being examined by prosecutors in the US attorney’s office for the southern district of New York, centers on a part-owner of Paxum Bank – an individual named Anton Postolnikov, who appears to be a relation of Putin ally Aleksandr Smirnov. Smirnov, who heads the Russia-controlled maritime company Rosmorport, worked in the Central Office of the Russian government until 2017. Before that, Smirnov was the First Deputy Minister of Justice of Russia until 2014, and for most of Putin’s first two terms as president, Smirnov served in the executive office of the president.” [Guardian, 3/15/23]
Paxum Bank Had A History Of Providing Banking Services For The Pornography And Sex Worker Industries, Making It At A Higher Risk For Money Laundering And Illicit Financing. According to the Guardian, “Prosecutors appear to have also taken a special interest in the payments because the off-shore Paxum Bank has a history of providing banking services for the pornography and sex worker industries, which makes it higher risk of engaging in money laundering and other illicit financing.” [Guardian, 3/15/23]
Paxum Bank Promotes Itself As “The #1 Trusted Payment Service For The Adult Industry!” According to the Washington Post, “Paxum itself remains a mystery. The company has promoted itself online as a way for video streamers of adult content to coordinate financial transactions across international borders and, in 2021, Paxum’s then-chief executive, Andrei Octav Moise, told BCAMS Magazine, a trade publication for the business of live webcam models, that the bank was ‘proud and happy to be considered the #1 trusted payment service for the adult industry!’” [Washington Post, 5/13/23]
The $8 Million Was Not Returned, Despite Reservations Of Its Origins, Partly Because It Made Up Two-Thirds Of All Of TMTG’s Money. According to the Guardian, “The obscure origins about the $8m loans caused alarm at Trump Media and, in the spring of 2022, Trump Media’s then-chief financial officer Phillip Juhan weighed returning the money, according to Wilkerson. But the money was never returned, Wilkerson said, in part because losing $8m out of the roughly $12m cash that Trump Media had in its accounts at that time would have placed significant stress on its financial situation.” [Guardian, 3/15/23]
Spring, 2022: TMTG Only Had $12 Million In Cash. According to the Guardian, “The obscure origins about the $8m loans caused alarm at Trump Media and, in the spring of 2022, Trump Media’s then-chief financial officer Phillip Juhan weighed returning the money, according to Wilkerson. But the money was never returned, Wilkerson said, in part because losing $8m out of the roughly $12m cash that Trump Media had in its accounts at that time would have placed significant stress on its financial situation.” [Guardian, 3/15/23]
Donald Trump Jr. Was Aware Of The Original Loan And Told TMTG Lawyers To Proceed With The Transaction. According to the Guardian, “There appears to have been some awareness at Trump Media that the first $2m was to come through because Trump’s eldest son Don Jr, who joined the board with Trump ally Kash Patel and former Republican-turned Trump Media chief executive Devin Nunes, had confirmed to the company’s lawyers to proceed with the transaction. ‘Just want to keep you in the loop – no guaranty that these will get signed and funded, but we remain hopeful,’ John Haley, outside counsel for Trump Media said in a 24 December 2021 email seen by the Guardian, to which Don Jr replied: ‘Thanks john much appreciated. d.’” [Guardian, 3/15/23]
Postolnikov Made Nearly $23 Million From TMTG-DWAC Merger. According to Raw Story, “An insider trading investigation involving a merger between a Miami-based company Digital World Acquisition Corporation (DWAC) group and Trump Media & Technology Group Corp (TMTG) has exposed the nearly $23 million windfall pocketed by Russian-American businessman Anton Postolnikov, according to The Miami Herald.” [Raw Story, 1/24/24]
April 2023: Trump Media CEO Devin Nunes Sued The Guardian, Penske Media Corporation, Sarasota Herald-Tribune Columnist Chris Anderson, And Former Trump Media Executive Will Wilkerson For Defamation. According to the Sarasota Herald-Tribune, “The CEO of Trump Media and Technology Group is suing Sarasota Herald-Tribune columnist Chris Anderson for defamation and defamation by implication related to a column published in March, according to court records. Devin Nunes, who is also the president and director of the media company, filed the lawsuit in the 12th Judicial Circuit Court on Monday against The Guardian, Penske Media Corp., owner of Variety magazine, Anderson and Will Wilkerson. The lawsuit says Wilkerson has been ‘ousted’ from Trump Media.” [Sarasota Herald-Tribune, 4/6/23]
Nunes Alleged That No Investigation Ever Took Place. According to the Sarasota Herald-Tribune, “Nunes's lawsuit claims that the ‘entire story is fabricated,’ that there wasn't a federal investigation into Trump Media and Technolgy Group for possible money laundering or a criminal inquiry, and federal prosecutors never examined the two loans totaling $8 million wired to the media company. Further, the lawsuit claims that Wilkerson and his agents ‘worked in concert with Guardian to craft the language used in the article’ as a way to defame and interfere with Nunes's business.” [Sarasota Herald-Tribune, 4/6/23]
December 2023: Nunes Dismissed His Lawsuit. According to the Sarasota Herald-Tribune, “The CEO of Trump Media and Technology Group has dismissed his lawsuit against Sarasota Herald-Tribune columnist Chris Anderson and other media outlets for alleged defamation related to a column published in March 2023. Court records indicate Devin Nunes voluntarily dismissed all the defendants in the case without prejudice on Dec. 15, four days before a scheduled case management hearing and eight months after filing suit.” [Sarasota Herald-Tribune, 1/5/24]
Patrick Walks Invested Approximately $6.2 Million In Trump’s Truth Social Between December 2021 And February 2022. According to the Daily Beast, “Walsh is currently CEO and owner of Empire Holdings Investments, which controls luxury gym brands like TMPL, Palm Beach Sports Club, and LIV. Reuters reported that Walsh invested approximately $6.2 million in Trump’s Truth Social between December 2021 and February 2022.” [Daily Beast, 11/24/23]
Walsh Was Sued By Former Employee Taryn Baldwin For Sexual Misconduct. According to the Daily Beast, “In January 2022, Taryn Baldwin was excited to start her personal training career at TMPL Lexington, a 24,000-square-foot gym and spa in Midtown Manhattan. […] But about four months in, her dream job allegedly became a nightmare. That’s when, she says, she met Patrick Walsh, the gym’s 47-year-old CEO and reportedly the third largest investor in former President Donald Trump’s Truth Social. […] Terrified of professional backlash, Baldwin remained silent about the alleged sexual harassment after she quit her job, the lawsuit states.” [Daily Beast, 11/24/23]
Walsh Was Sued By Former Employee Megan Lange For Sexual Misconduct. According to the Daily Beast, “Baldwin is the second woman to file a federal lawsuit against Walsh and his companies. […] ‘I didn’t work this hard in my life to be burned by a guy that uses his privilege and power to victimize women,’ said Megan Lange, a former TMPL employee who filed a September lawsuit alleging she was stonewalled, retaliated against, and financially manipulated by Walsh between 2021 and 2023.” [Daily Beast, 11/24/23]
December 2023: TMTG And DWAC Announced A “Significant Milestone” In Their Merger Because They Filed An Amendment To Their S-4 Registration Statement. According to Just The News, “Digital World Acquisition Corp. and the Trump Media & Technology Group on Friday announced an ‘significant milestone’ in the long-delayed merger that would enable the Trump-controlled Truth Social platform to secure listing on the stock exchange and securing financing for a major expansion. Specifically, the firms filed an amendment to their S-4 Registration Statement, which includes a prospectus related the merger. The S-4 is still subject to revisions, pending approval from the Securities and Exchange Commission. The firms completed the initial S-4 filing in November.” [Just The News, 12/22/23]
Nunes: “With This Filing, We Are Closing In On The Final Steps Before Our Merger Becomes Effective And Goes To The Shareholders For A Vote.” According to Just The News, “‘With this filing, we are closing in on the final steps before our merger becomes effective and goes to the shareholders for a vote,’ TMTG CEO Devin Nunes said in a press release. ‘Once consummated, we believe that the merger will allow Truth Social to exit the research and development phase, establishing our platform as a true start-up enterprise and the centerpiece of a movement to keep the internet open and protect free expression. For now, we've answered the SEC's inquiries and will be happy to address any follow-up questions they may have.’” [Just The News, 12/22/23]
February 2024: DWAC Was Nearing A $50 Million Finance Deal For Its Merger With TMTG. According to Reuters, “Digital World Acquisition Corp (DWAC.O), opens new tab, the blank-check acquisition company that has agreed to take former U.S. President Donald Trump's social media platform public, is nearing a $50 million financing deal, people familiar with the matter said on Thursday. The deal, which could be announced in the next few days, is based on convertible notes and will help fund DWAC while it tries to complete its merger with Trump Media & Technology Group (TMTG), owner of social media platform Truth Social, the sources said.” [Reuters, 2/8/24]
February 15, 2024: The SEC Approved The Merger Proposal For TMTG And DWAC. According to the Washington Post, “The Securities and Exchange Commission has approved the merger proposal of former president Donald Trump’s media start-up with a special purpose acquisition company, a critical step for a long-delayed deal that would make the owner of Trump’s website Truth Social a publicly traded company and unlock $300 million in investor funds. Digital World Acquisition, the SPAC that first launched the merger for Trump Media and Technology Group in 2021, said in an SEC filing late Wednesday that the SEC had signed off on its registration statement and that Digital World would announce a shareholder meeting within two days to vote on the merger’s adoption. Digital World shares climbed Thursday morning, to about $50. The approval is a victory for Trump, who will hold more than 78 million shares in the post-merger company, a filing shows — a stake that, at current prices, would be worth nearly $4 billion.” [Washington Post, 2/15/24]
March 22, 2024: Shareholders Of DWAC Voted In Favor Of The Merger Deal. According to Reuters, “Shareholders of Digital World Acquisition Corp (DWAC) (DWAC.O), opens new tab, the SPAC that plans to list Trump Media & Technology Group on the stock market through a merger, voted in favor of the deal on Friday. While the next step would be for the deal to be completed next week, its future is fraught with uncertainty. Digital World's former CEO Patrick Orlando and former Trump business associates Andy Litinsky and Wes Moss have separately sued to block the merger, arguing they are entitled to more shares for their previous work on the deal.” [Reuters, 3/22/24]
DWAC Sued To Force Its Biggest Investor, ARC Global Investments II, To Vote In Favor Of The Deal Before A Critical Deadline. According to Bloomberg Law, “The company planning to take Trump Media & Technology Group public sued to force its biggest investor, ARC Global Investments II, to vote in favor of the deal before a critical deadline this week. The suit, filed in New York state court Tuesday, is the latest legal battle between Digital World Acquisition Corp. and its former chairman, Patrick Orlando. While he was ousted last year, Orlando still holds significant leverage over the company through his ability to influence the voting shares of ARC.” [Bloomberg Law, 3/20/24]
TMTG Became A Public Company Following Merger With DWAC. According to the New York Times, “Former President Donald J. Trump’s social media company — and the parent of his favorite communications platform, Truth Social — became a public company on Friday through a merger that will raise Mr. Trump’s wealth by billions of dollars and potentially help pay his mounting legal bills. Trump Media & Technology Group is poised to debut on Wall Street at a market value of around $5 billion — based on the $37 share price of its merger partner, Digital World Acquisition Corp. Given that Mr. Trump owns more than 60 percent of the company, his overall net worth will increase by $3 billion — instantly doubling his wealth from the $2.6 billion estimate by Forbes magazine in October.” [New York Times, 3/22/24]
The Merger’s Completion Would Require DWAC To Pay A $18 Million Penalty To The SEC Under A Settlement Which Ruled DWAC Misled Investors And Violated Antifraud Provisions. According to the Washington Post, “The merger’s completion would require Digital World to pay an $18 million penalty to the SEC, under a settlement announced last summer, to resolve charges that it had misled investors and violated antifraud provisions regarding its initial merger plans.” [Washington Post, 2/15/24]
Post-Merger, Trump Owned Roughly 79 Million Shares, Which Were Valued At Nearly $4 Billion. According to the New York Times, “Mr. Trump will have an overwhelming majority stake in the postmerger company and own 79 million shares. Shares of Digital World have soared this year on expectations that the deal will be completed and that Mr. Trump will win the Republican nomination for president. The stock closed on Monday at $47.23 per share. At that price, the former president’s stake would be worth nearly $4 billion.” [New York Times, 2/26/24]
Trump Would Be Expected To Own Between 58% And 69% Of The Company. According to the Washington Post, “Trump, who would own between 58 and 69 percent of the company, and other investors could earn tens of millions more shares through a provision, known as an ‘earnout,’ tied to the stock’s performance, a filing said.” [Washington Post, 2/15/24]
Trump Stood To Acquire Tens Of Millions Of Special Bonus Shares If TMTG Performed Well Once Public. According to the Associated Press, “Trump is listed as chair of TMTG. He will get tens of millions in special bonus shares if the combined company performs well, handing the former president possibly billions of dollars in paper wealth.” [Associated Press, 12/4/21]
The Merger Included A “Lockup Provision” Which Prevents Major Shareholders, Including Trump, From Selling Their Shares Within Six Months Of The Deal Closing. According to the New York Times, “The merger documents contain fairly standard language that limits major shareholders like Mr. Trump from selling shares for six months after the deal’s closing. Lockup provisions, which are common in SPAC deals, are intended to assure investors that major shareholders will not immediately cash out after a merger is complete, said Kristi Marvin, a former investment banker and the founder of SPACInsider, a SPAC database. If a flood of restricted shares immediately hits the market, it could depress the stock price. Digital World’s lockup provision also limits major shareholders from using the stock as collateral for a loan during that six-month period.” [New York Times, 2/26/24]
Trump Could Transfer Shares To A Trust Which May Be Able To Be Used As Collateral For A Loan Or Can Transfer The Shares To An Immediate Family Member. According to the New York Times, “Can Mr. Trump transfer shares during the lockup period? Yes. The provision permits a major shareholder like Mr. Trump to transfer shares to a trust. A trust backed by some of Mr. Trump’s shares might be able to use that stock as collateral for a loan. He also can transfer shares to an immediate family member.” [New York Times, 2/26/24]
Trump Valued Trump Media At Less Than $25 Million, While Investors Valued It At More Than $1 Billion. According to Bloomberg, “Donald Trump values his nascent media company at less than $30 million, a stark discount to the more than $1 billion valuation implied by investors who piled into the blank check that’s hoping to bring the firm public. The former president said Trump Media & Technology Group Corp., which is going public through a SPAC merger with Digital World Acquisition Corp., is worth $5 million to $25 million, according to a financial disclosure filed late Friday with the Federal Election Commission.” [Bloomberg, 4/17/23]
The Large Difference In Valuation Might Be The Result Of Trump Loyalists That Are Indifferent To The Possibility That The Merger With DWAC Fails. According to Bloomberg, “‘This massive discrepancy is because one is a very conservative estimate made for the Federal Election Commission and one is a multiple of sales’ that compares it to companies like Twitter, says Michael Broudo, an event-driven equities analyst at Oppenheimer. ‘There’s a very loyal retail contingent that’s either indifferent to the downside if the deal collapses, or is willing to take the risk.’” [Bloomberg, 4/17/23]
Digital World Acquisition Corp Board Member Eric Swider Was Accused Of Plotting A Coup By Hacking Files To Eventually Attack And Replace Patrick Orlando As CEO. According to NBC News, “Investment firms led by the former CEO of the SPAC that merged with Donald Trump’s media company allege that their files were hacked and stolen by a current member of the media company’s board of directors. In a federal civil lawsuit filed in South Florida last month, the firms accuse board member Eric Swider of plotting a coup in early 2023 to replace Patrick Orlando as CEO of the special purpose acquisition cop, Digital World Acquisition Corp. As part of that attempted ouster, Swider and others allegedly ‘stole access’ to the firms’ computer systems and then ‘used the stolen information to attack’ Orlando. It was ‘an audacious scheme to seize control of and enlarge their holdings,’ claims the suit, which was filed by Benessere Investment Group and ARC Global Investments II.” [NBC News, 4/10/24]
Trump Media & Technology Group Co-Founders Andy Litinsky And Wes Moss Were Sued By Trump For Their Company Stake Because They Allegedly “Violated An Agreement About The Setup And Don’t Deserve Their 8.6% Stake.” According to Bloomberg, “Donald Trump has sued two co-founders of his newly public Trump Media & Technology Group Corp., claiming they set the company up improperly and shouldn’t get any stock in it. In the latest legal skirmish over who gets how much of the hot but flailing meme stock, Trump alleges that Andy Litinsky and Wes Moss violated an agreement about the setup and don’t deserve their 8.6% stake, currently valued at $606 million. The lawsuit, which was filed on March 24 in Florida state court and hasn’t previously been reported, comes after the pair brought their own suit against the former president in Delaware Chancery Court over their promised stake in the social media company.” [Bloomberg, 4/2/24]
Devin Nunes, The CEO Of Trump Media (DJT), Asked Congress To Investigate Illegal Activity That Was Driving Down Trump Media Shares Price Because There Were “Strong Indications Of Unlawful Manipulation Of DJT Stock.” According to CNN, “Trump Media & Technology Group is asking Congress to investigate its suspicions that illegal activity is driving down its share price. In a letter disclosed on Wednesday, Devin Nunes, the CEO of Truth Social owner Trump Media (DJT), alerted the GOP Chairmen of the House Ways and Means, Judiciary, Financial Services and Oversight Committees to the ‘urgent matter’ of ‘potential manipulation’ of the company’s share price. ‘We assess there are strong indications of unlawful manipulation of DJT stock,’ Nunes wrote in the letter.” [CNN, 4/24/24]
June 2024: Trump Media And Technology Asked Nasdaq To Help Them Investigate Whether Traders Engaged In Naked Short Selling Of Their Stock. According to Business Insider, “Former President Donald Trump's media company is doubling down on claims there's something fishy going on with its stock — and it wants the Nasdaq's help investigating. In another letter to Nasdaq CEO Adena Friedman, Devin Nunes — the CEO of Trump Media & Technology Group — raised concerns Tuesday about ‘manipulation.’ Nunes wants to investigate whether ‘Wall Street insiders’ are engaged in ‘naked’ short selling of the stock, which trades under the DJT ticker. Illegal naked short sales involve shares that haven't actually been borrowed.” [Business Insider, 6/5/24]
April 1, 2024: Trump Media & Technology Group Shares Plummeted 21%, Trading At About $48 Per Share. According to the Daily Mail, “Donald Trump experienced a stunning paper loss of $1 billion on his Trump media stock Monday, after a filing revealed it lost $58 million last year. Stock in Trump Media was trading at $48 per share Tuesday morning – a drop of 32 percent from its price five days ago. It dropped 21 percent in a single day of trading Monday, as investors processed new details of the company's financials amid chatter that it is the latest 'meme' stock to capture market interest.” [Daily Mail, 4/1/24]
April 16,2024: Trump Media & Technology Group Shares Fell 14% Ending At $22.85 Per Share. According to the Wall Street Journal, “Shares of Truth Social's parent fell about 14% Tuesday, extending a drop that has erased much of the company's share-price gains for the year. […] The stock closed at $22.84, rising a bit off intraday lows. It remains up about 30% this year, but well off its March 22 record highs above $97.” [Wall Street Journal, 4/16/24]
April 17, 2024: Trump Media & Technology Group Shares Had Uptick, They Rose 15.6% To $26.40 Per Share At Close. According to CNBC, “Trump Media closed more than 15% higher Wednesday. The big bump for DJT followed two days of share losses on the Nasdaq. Trump Media, which owns the Truth Social app, closed more than 14% lower on Tuesday, and more than 18% on Monday. On Wednesday, DJT shares closed at $26.40, an increase of $3.56 per share, or nearly 15.6% higher.” [CNBC, 4/17/24]
Trump Media & Technology Group Reported A Loss Of $327.6 Million During The First Three Months Of 2024, The Company Generated Just $770,500 Of Revenue. According to CNN, “Trump Media & Technology Group lost more than $300 million during the first quarter and generated very little revenue, the owner of Truth Social announced in a press release Monday. […] Trump Media (DJT) reported a loss of $327.6 million during the first three months of the year driven mostly by one-time losses linked to the deal that brought the company public earlier this year. The company lost $210,300 a year earlier. The company blamed the losses on non-cash expenses from the conversion of promissory notes and the elimination of previous liabilities. […] The company generated just $770,500 of revenue, marking the second-straight quarter where its revenue totaled less than $1 million.” [CNN, 5/20/24]
Trump Media & Technology Group Awarded Trump An Additional 36 Million Shares As A Bonus After Trump Media Traded Above A Certain Level For A Set Number Of Days. According to NPR, “Former President Trump is set to get $1.2 billion richer — at least on paper. The windfall comes thanks to being rewarded with an additional 36 million shares in Trump Media & Technology Group, the company behind his Truth Social app. The shares are a bonus provided to him after Trump Media traded above a certain level for a set number of days. Trump met that criteria at the close of trading on Tuesday. The new shares raise his stake in Trump Media to 115 million shares, boosting the entire net worth of his holdings in the company to $3.7 billion.” [NPR, 4/23/24]
Trump Media Planned To Offer More Than 21.4 Million Shares Of Common Stock, Issuable Upon The Exercise Of Warrants By Existing Investors. According to CNBC, “The company’s intent to issue more common stock was disclosed in a preliminary prospectus filed with the Securities and Exchange Commission. The shares cannot be issued until a registration statement with the SEC takes effect. The filing describes a plan to offer more than 21.4 million shares of common stock, issuable ‘upon the exercise of warrants,’ the filing shows. Stock warrants give their holder the ability to buy shares at a predetermined price within a certain time frame.” [CNBC, 4/15/24]
June 2024: Trump Media & Technology Shares Fell 15% After The Securities And Exchange Commission Declared Effective The Registration Of Additional Shares Which Left The Stock Vulnerable To Dilution. According to the Wall Street Journal, “Shares in Trump Media fell 15% after the Securities and Exchange Commission declared effective the registration of additional shares, leaving the stock vulnerable to dilution but boosting the Truth Social-owner's fundraising hopes. The move by the SEC allows for the resale of shares and warrants held by early investors in the company.” [Wall Street Journal, 6/20/24]
May 3, 2024: Trump Media & Technology’s Auditor, BF Borgers, Was Accused By The SEC Of “Deliberate And Systemic Failures,” Including “Fabricating” Audit Documentation And Falsely Representing To Clients Its Work Would Comply With Accounting Standards. According to CNN Business, “BF Borgers, Trump Media & Technology Group’s independent accounting firm, was charged by the Securities and Exchange Commission on Friday with widespread fraud impacting more than 1,500 filings. […] The SEC accused BF Borgers of ‘deliberate and systemic failures,’ including ‘fabricating’ audit documentation and falsely representing to clients its work would comply with accounting standards. The agency described this as ‘massive’ fraud taking place between January 2021 and June 2023. Trump Media currently lists BF Borgers as its independent auditor. According to filings, Borgers served as Trump Media’s independent registered accounting firm before it went public in March. Later in March, the audit committee of Trump Media approved the hiring of Borgers as the public company’s accounting firm.” [CNN Business, 5/3/24]
Trump Media & Technology Group Said They Fired BF Borgers After US Regulators Accused The Accounting Firm Of Massive Fraud Then Said They Hired Semple, Marchal & Cooper To Replace BF Borgers. According to CNN, “Truth Social owner Trump Media & Technology Group announced Monday it fired BF Borgers after US regulators accused the accounting firm of ‘massive fraud.’ The decision to fire BF Borgers was expected and required by regulators. The accounting firm did not respond to a request for comment. Trump Media said in a filing that it ‘dismissed’ BF Borgers as its independent registered public accounting firm on Friday. That was the same day the Securities and Exchange Commission charged BF Borgers and its owner with widespread fraud and accused it of operating a ‘sham audit mill.’ Trump Media said that on Saturday it hired Semple, Marchal & Cooper to replace BF Borgers.” [CNN, 5/6/24]
The Trump Media & Technology Group Said They Would Not File Their First-Quarter Report On Time Due To A Change In Auditor After Their Previous One Was Charged By The SEC. According to Bloomberg Tax, “Trump Media & Technology Group says it won’t file its first-quarter report on time, citing the recent appointment of a new auditor following the SEC’s settlement of charges against the company’s previous auditor.” [Bloomberg Tax, 5/15/24]