Trump tightens grip on social media company after successful SPAC deal

Oct 26 (Reuters) – Former U.S. President Donald Trump will be able to retain ownership of his newly launched social media business even if he chooses to make another run for the White House or is convicted by prosecutors investigating on its commercial relations.

Trump said last week that TRUTH Social would be created through a new company resulting from the merger of Trump Media and Technology Group (TMTG) and blank check company Digital World Acquisition Corp (DWAC.O).

According to regulatory filings released late Tuesday, Trump was referred to as a “company principal,” although the exact size of his stake in the company was not disclosed.

However, the former chairman is set to retain his stake in TMTG, even if the company faces a “significant disruptive event” – the latest filings include a clause designed to protect his stake.

“In order to maximize business continuity and to minimise, mitigate or eliminate any negative impact on the company of a significant disruptive event, the ownership and position of the principal of the company in the company must be structured in a way to eliminate the need for restructuring. Ownership or position changes were a significant disruptive event to occur,” according to the filing.

Since Trump was voted out of office in the last presidential election of 2020, he has repeatedly hinted that he could run for president for a third time in 2024.

Trump and his business interests are also the subject of numerous investigations by US authorities – in June Trump’s eponymous company and its chief financial officer were charged, the first charges to stem from an investigation lasting more than two years. by New York prosecutors into Trump and his business dealings, Reuters reported.

In the latest filings, DWAC highlighted the risks of being associated with Trump’s company.

“The buyer hereby acknowledges the controversial nature of being associated with the director of the company and the family of the director of the company,” he said.

As part of an earn-out clause in the deal, TMTG shareholders will receive an additional 40 million shares, based on the share price performance of DWAC, which closed nearly 30 minutes on Tuesday. % but still trades well above the SPAC IPO price of $10 per share.

Earlier in October, Reuters reported that the merger with TMTG had generated a potential windfall of $420 million for DWAC’s top backer Patrick Orlando, who has been trying for a decade to reinvent himself as a serial trader. Read more

Reporting by Anirban Sen in Bangalore; Editing by Stephen Coates

Our standards: The Thomson Reuters Trust Principles.