While former President Donald J. Trump’s new social media company and its merger partner announced in December that they had raised $ 1 billion in additional private funding for the deal, ending speculation about investor identities.
Who were the nearly three dozen investors who staked on the success of the former president’s new company? Are they big names on Wall Street? Political supporters of Shri. Trump? Technology and media funds are sold on the promise of Twitter’s right choice?
A draft document that was shared with the New York Times about a 1 billion investment – called “private investment in public equity” or PIPE – sheds some light. In such deals, the investor exchanges cash for shares which are later registered by the company for sale in the open market.
According to the document, investors are mostly a combination of small to medium-sized hedge funds based in the United States and Canada. The draft was circulated among investors on Tuesday, and two informants said the final version was expected to be filed with regulators on Thursday, although times could change.
Hedge funds Pentwater Capital and Sebi Management are the two largest investors in private placements, as previously reported by The Times. According to the draft document, Naples, Fla. The પે 10 billion hedge fund, affiliated with Pentwater, stands to acquire the largest number of shares through a deal.
Other major investors include Anson Funds Management, Kershner Trading Americas, K2 & Associates, Yorkville Advisors and MMCAP. Although they are not household names, some hedge funds are known worldwide for PIPE investments, which often have attractive terms. Many of Wall Street’s large hedge funds missed out on the opportunity because they were Mr. Trump.
At least two investors on the list are not yet known.
One big investor is an entity called Truth SPC. The name appears to be a reference to Truth Social, the Twitter look-alike that is Mr.’s main product. Trump Company, Trump Media & Technology Group. But online searches, including U.S. Corporate Records, did not reveal any entity by that name.
Another large investor whose profitable ownership is unclear is called Red Rowan Investments. The company appears to have been incorporated into the Cayman Islands in December.
The $ 1 billion private placement is a crucial lending component to the proposed deal between Trump Media and Digital World Acquisitions, a “blank check” or special purpose acquisition company that went public in September. Digital World has raised about $ 300 million through its initial public offering.
Investors in private placements do not need to turn over any money unless the Securities and Exchange Commission approves the merger. Once that is done, according to the draft document, investors will collectively acquire millions of shares in a post merger company.
The SEC is investigating whether some of the communications between Trump Media and the digital world violated the rules before his deal was announced.
Patrick Orlando, chief executive officer of Digital World, did not return requests for comment, nor did Trump media representatives.
Truth Social has gotten off to a rocky start. Mr. Trump recently began posting messages regularly to his nearly three million followers. It had about 90 million followers on Twitter before the platform rolled it out last year.
Elon Musk, the billionaire entrepreneur who recently offered to buy Twitter, has said he would like to see Mr. Trump returns to the platform if their deal closes. Mr. Trump said he intends to stay on Truth Social. But a new licensing deal Mr. Trump signs with the media, opening the door for him to post political messages on Twitter if the social network lifts its ban.