Trump’s SPAC, explained

Donald Trump’s new venture -- Truth Social -- wants to take on CNN, Twitter, and Amazon Web Services. There are no details as to how that’ll happen.

With how wild 2021 has been, it was inevitable that the following sentence would be typed by business journalists: Donald Trump is rolling out a SPAC.

As a quick primer, a SPAC is “special purpose acquisition company” that raises money into a public shell corporation before acquiring a business (we wrote an explainer here).

Trump’s venture is called Truth Social…

… and plans to merge with a SPAC called Digital World Acquisition per Axios.

The venture is supposedly Trump’s effort at building a new media empire, but details are lacking:

  • What’s the product? So far, there’s a preorder for Truth Social in the App store (Axios says it looks like a “reskinned Twitter”).
  • Who’s running it? The SPAC sponsor Patrick Orlando has not completed a successful SPAC merger, and the only other names mentioned are Trump as chairman and Scott St. John as a streaming producer.

Shares in the vehicle ($DWAC) jumped 300%+ on the news and trading was halted multiple times because of volatility.

The larger ambition…

… is an entity called the Trump Media & Technology Group. In a 22-page slide deck, the competitive landscape includes over $5T in market cap value (CNN, Twitter, Facebook, Amazon Web Services, Stripe).

Unsurprisingly, there are no further details.

Somehow, this isn’t even the wildest SPAC announcement this month. Two 20-something frat brothers — one the scion of a Dallas energy family — just raised $125m to find a Latin American acquisition target.

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