Trump SPAC Deal Finally Files a Proxy: 10 Key Details We Now Know

Former President Donald Trump speaks during the American Freedom Tour at the Austin Convention Center in Austin, Texas, on May 14, 2022. (Brandon Bell/Getty Images)

Seven months after announcing a SPAC merger, a social media company owned by former President Donald Trump has filed its proxy. Here are the key details from the more than 250 pages contained in the proxy filing.

1. New Name

If the merger between Trump Media & Technology Group and Digital World Acquisition Corp is completed, the new company will be known as Trump Media & Technology Group Corp. Shares will trade on the Nasdaq with the new ticker TMTG for common shares and TMTGW for Digital World warrants.

2. Dilution to Shareholders

TMTG existing shareholders will receive up to 40 million shares of common stock based on the price of Digital World Acquisition. The earnout is based on the volume-weighted average price of Digital World stock based on price levels of $15, $20, and $30.

PIPE investors also have the option to purchase one million shares of Digital World Convertible Preferred Stock for $1,000 per share, which would convert into 29,761,905 shares of common stock.

3. Public Share Ownership

The percentage of the new company owned by public shareholders will be contingent on the amount of dilution from earnouts and PIPE investments along with the amount of redemptions that happen at merger vote. Public shareholders are expected to own 23.7 percent of the new company if no redemptions happen at merger. If the PIPE investors purchase additional shares at vote, the public ownership would be 19.2 percent of the new company.

4. Deal Closing Date

A merger vote has not been set for the SPAC deal with the filing. The parties believe a deal will be completed in the second half of 2022. Digital World has a current deadline of Sept. 8, 2022 to complete a merger. The SPAC can also extend the deadline to March 8, 2023.

5. The Chairman

Trump will serve as the Chairman of the Board of the new company, according to the filing. He’s listed as having 73.3 million shares of common stock, representing 57.8 percent of the voting power of the outstanding common stock.

“President Trump will have the ability to significantly influence the outcome of matters submitted to the Combined Entity’s stockholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of the Combined Entity’s assets.”

The filing also names Donald J. Trump Jr, son of the former president, as a Director for TMTG.

6. Truth Social Launch

The filing takes a shot at several big tech companies once again that have censored certain individuals, including Donald Trump. Companies named include Meta Platforms, Twitter Inc., Netflix Inc., Alphabet Inc., and Amazon.com Inc.

“The company (Twitter) also outright bans conservative users such as TMTG’s Chairman, former U.S. President Donald J. Trump—even while it continues to allow the Taliban to freely post their views to the world,” the filing reads.

Truth Social launched in the first quarter of 2022 with a goal of free speech and not relying on “hostile big tech companies.” The social media platform is available to iOS users currently with the filing saying that it will be available on desktop and other mobile devices in the second quarter of 2022.

7. SEC Could Delay Transaction

A current SEC investigation could delay or impact the potential merger. Digital World received a request for documents and information regarding meetings that were held related to the merger.

8. Several Trump Risk Factors

The risk factors in the filing are numerous and several pertain to the chairman of the company and former president.

“TMTG’s success depends in part on the popularity of its brand and the reputation and popularity of its Chairman, President Donald J. Trump.”

The company said the popularity of Trump could impact the platform. A survey cited in the filing said that only 30 percent of people surveyed would use a social media site associated with Trump.

The filing cites numerous lawsuits Trump is involved in, including his role in the events that happened on the U.S. Capitol on Jan. 6, 2021.

The filing also names several former Trump businesses that have been the subject to cease-and-desist orders from the SEC and several that have filed for bankruptcies.

“There can be no assurances that TMTG will not also become bankrupt.”

9. Other Merger Targets

The filing names several targets that were considered by Digital World Acquisition prior to the merger with Trump Media & Technology Group. This includes conversations with a fintech, a pet care company, a robotics company, several electric vehicle companies, a computing company, a defense contractor, a cryptocurrency exchange, a cybersecurity company, a background screening provider and several other companies.

Likewise, TMTG said in the filing it held talks with two dozen SPACs over a potential merger.

Part of the SEC investigation is over the potential that the SPAC in question held talks with TMTG prior to completing its IPO.

10. Trump Exclusive to Truth Social?

One piece found in the filing involves another social media platform that was trying to recruit Trump onto the platform. Jason Miller, CEO of GETTR tried to recruit Trump to join the platform.

“In mid-June 2021, TMTG retained counsel who subsequently prepared a cease-and-desist letter to be addressed to Mr. Miller advising GETTR to cease recruiting President Trump, who had existing contractual obligations with respect to TMTG.”

The statement could signal Trump won’t return to Twitter, even if he is allowed back on the platform due to his obligation to Truth Social.

By Chris Katje

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