One of the most talked about SPAC mergers of all time saw shares surge in valuation and demand and brought interest back to the SPAC market. A filing shows some provisions for the SPAC merger based on its well-known namesake leader.
What Happened: Trump Media & Technology Group announced a merger with Digital World Acquisition Corp DWAC in a deal valuing the new company at up to $1.7 billion in late 2021.
The company is the parent of TRUTH Social, a social media platform taking on Twitter, Facebook and other social media platforms.
The company is led by former President Donald Trump.
A filing from the company shared some interesting provisions based on its leader, which are more relevant after Trump was recently indicted by a grand jury on charges related to hush money reportedly paid to porn star Stormy Daniels.
Related Link: From Presidential Portrait To Mug Shot: What's Next For Donald Trump After New York Indictment?
SPAC Provisions: The SPAC merger filing said that a “material disruptive event” will not change the company’s ownership.
“The company principal’s ownership and position in the company shall be structured in such a way as to eliminate the need for restructuring of ownership or changes in position were a material disruptive event to occur,” the filing reads.
A material disruptive event is listed to include “the company principal announces that he is running for a public office” or “the company principal is personally convicted of a felony criminal offense.”
The wording is significant, as it says that Trump will still lead the company if he runs for president in 2024 or is convicted of a felony.
The new filing also clarified how much the stock needs to trade at for the full $1.7 billion valuation to hit.
Earn-outs are listed at prices of $15, $20 and $30 for DWAC shares. The additional shares are 15 million shares based on a $15 share price, 15 million based on a $20 share price and 10 million based on a $30 share price. The potential earn-outs total $825 million.
The lock up on shares is six months after the merger closing or 150 days if the stock price is above $12.
The SPAC merger has faced several setbacks, including investigations from the SEC that could continue to delay the deal getting approved.
The odds of Trump facing any jail time remain a big question, but have increased with the indictment. One thing is certain based on the SPAC merger provisions: If a deal is approved between Digital World Acquisition and Trump Media & Technology Group, Trump will be in control whether in jail or not.
DWAC Price Action: DWAC shares closed 7.58% higher at $14.06 on Friday, versus a 52-week trading range of $12.34 and $69.59.
Read Next: Biden, DeSantis, Pence, McCarthy, Harris, Pelosi, Schumer And Others React To Trump's Indictment
Some elements of this story were previously reported by Benzinga and it has been updated.
This illustration was generated using artificial intelligence via MidJourney.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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