These investors invest $1 billion in Trump Media

When former President Donald J. Trump’s fledgling social media company and its merger partner announced in December that they had secured an additional $1 billion in private funding for the deal, it sparked speculation about the identity of investors.

Who were the approximately three dozen investors betting on the success of the former president’s new company? Were they big names on Wall Street? Political supporters of Mr. Trump? Tech and media funds sold on the promise of a right-wing alternative to Twitter?

A draft document that was shared with The New York Times about the $1 billion investment – ​​called “private investment in public equity” or PIPE – sheds some light. In such an agreement, an investor exchanges cash for shares which are then registered by the company to be sold in the open market.

Investors are primarily a mix of small to medium-sized hedge funds based in the United States and Canada, according to the document. The draft was circulated to investors on Tuesday, and two people briefed on it said a final version was expected to be filed with regulators on Thursday, though the timeline could change.

Hedge funds Pentwater Capital and Sabby Management are two of the biggest investors in the private placement, as The Times previously reported. Funds associated with Pentwater, a $10 billion hedge fund based in Naples, Fla., are expected to get the most shares from the deal, according to the draft filing.

Other big investors include Anson Funds Management, Kershner Trading Americas, K2 & Associates, Yorkville Advisors and MMCAP. Although not household names, some are well known in the hedge fund world for making PIPE investments, which often have lucrative terms. Many of Wall Street’s biggest hedge funds passed on the opportunity because they were concerned about the prospect of teaming up with Mr. Trump.

At least two of the investors on the list were not yet known.

A large investor is an entity called Truth SPC. The name appears to be a reference to Truth Social, the Twitter lookalike that is a flagship product of Mr. Trump’s company, Trump Media & Technology Group. But searches online, including in U.S. company records, turned up no entities with that name.

Another big investor whose actual ownership is unclear is called Red Rowan Investments. The company appears to have been incorporated in December in the Cayman Islands.

The $1 billion private placement is a key financing element of Trump Media’s proposed deal with Digital World Acquisition, a “blank check” or special purpose acquisition company that went public in September. Digital World has raised nearly $300 million through its IPO.

Investors in the private placement are not required to return any money until the Securities and Exchange Commission approves the merger. Once that happens, investors will collectively get tens of millions of shares in the post-merger company, according to the draft document.

The SEC is investigating whether some of the communications between Trump Media and Digital World before their deal was announced violated the rules.

Patrick Orlando, the chief executive of Digital World, did not return requests for comment, nor did representatives from Trump Media.

Truth Social got off to a rocky start. Mr Trump only recently started posting regularly to his nearly three million followers. It had nearly 90 million followers on Twitter before the platform launched it last year.

Elon Musk, the billionaire entrepreneur who recently made an offer to buy Twitter, has said he would let Mr Trump return to the platform if his deal goes through. Mr. Trump said he intended to stay on Truth Social. But a new licensing agreement Mr. Trump signed with Trump Media opens the door for him to also post political messages on Twitter if the social network lifts its ban.

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