TFG is evidently merging a shell operation into a Special Purpose Acquisition Company

[LetMyPeopleVote]

This deal smells. At best TFG has a start up and how one can merge a start up into a SPAC does not sound right.

Special Purpose Acquisition Corporations were the rage last year. According to my son, they are loss leaders for the SEC public offering work but the biglaw firms are working on these deals on discount to get the acquisition work. SPACs are blank check companies with no assets and so are easy to get through the SEC review process because there are no financials or description of business. There were some recent changes to the accounting rules that evidently caused the number of SPAC offerings to drop in the second half of 2021.
TFG is merging a yet to be formed company with a brand new SPAC

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This is a SPAC with chinese executives

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This is interesting

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TFG will cause this entity to fail

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The EDGAR (SEC) filings do not cover this transaction.. The merger agreement and the form 8-k for this transaction has not been filed with the SEC and is not on EDGAR. Normally one cannot announce a deal like this without a Form 8-k filing being released at the same time

At some point, the merger agreement will have to be filed with the SEC and I will keep an eye out for this filing

[C_U_L8R]

1. Nothing from nothing

Most SPACs are supposed to acquire something of value. SEC please investigate.

[LetMyPeopleVote]

2. SPAC are not supposed to invest in start ups

It will be interesting to see the SEC filings on this transaction

[C_U_L8R]

3. Exactly.

Their only asset seems to be this stinky press release. Some may want to short this one.

[LetMyPeopleVote]

10. There is no way that TFG's operations would meet SEC requirements for a SPAC target company

What is more important is that I do not understand how one can roll a start up into a SPAC. As it appears to me, TFG's operations re a pure startup without a working website or any revenues. Target companies need to have financial statements for the Form S-4 that has to be filed to do the merger. https://www.forbes.com/sites/allbusiness/2020/11/11/10-key-questions-and-answers-about-spacs/?sh=2b1f6e862f83

6. How do SPACs target companies to acquire?
Once the SPAC has successfully completed its IPO, the sponsor can begin the search for a target company to acquire. Here are some of the criteria they employ in their deal search:

Deal size. Under stock exchange rules, the business combination must be with one or more targets that together have an aggregate fair market value of at least 80% of the assets held in the SPAC’s trust account (excluding certain items). To mitigate the dilutive impact of the 20% founder shares and make a De-SPAC transaction more attractive to a target, SPACs often prefer business combination targets that are four to eight times the SPAC size.

Industry. Most SPACs specify an industry or geographic focus for their target business combinations (e.g., tech sector, media industry, fintech, enterprise software).

Upside Potential. SPACs, like any other M&A buyer, seek to combine with targets that the sponsors believe have meaningful upside. This year, SPACs have increasingly focused on emerging growth companies that are relatively earlier stage than traditional IPO companies.

Financial Statements. The SEC proxy rules require that a proxy statement include two or three years of financial statements of the target, plus interim financial statements. The financial statements and the target’s auditor have to meet certain requirements, and thus the necessary audit or re-audit of the target’s financial statements can be a gating item for the business combination.

Public company readiness. It is important that the target company and its financial controls are ready to handle the rigor of being a public company with periodic reporting requirements.

Market Opportunity. SPACs will look for targets whose business has a large market opportunity.
Quality Management Team. The quality of a target’s management team will be an important factor for the sponsor.
Due Diligence. The SPAC will do extensive due diligence on the target company, similar to due diligence in M&A or IPO transactions.

TFG's operations do not appear to meet any of these criterion.

[C_U_L8R]

11. The goal may not be an actual acquisition

Perhaps this is looking more like a pump and dump scheme

[jmbar2]

4. And the excitement is bubbling over on StockTwits

Donald-Wack board

https://stocktwits.com/symbol/DWAC

[Norbert]

5. Like Gettr but with less cyber security

[LetMyPeopleVote]

6. This makes me smile

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[LetMyPeopleVote]

7. Pranksters have already defaced Trump's new social network

A public company is investing in this piece of crap. There will be some fun litigation

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Former president Donald Trump and his team declared Wednesday night that they would soon launch a “media powerhouse” that would help them triumph in their long-running war against Big Tech. But within hours, pranksters found what appeared to be an unreleased test version and posted a picture of a defecating pig to the “donaldjtrump” account.

The site has since been pulled offline — evidence that Trump is likely to face a daunting challenge in building an Internet business that can stand on its own.

Banned by all major social networks after his supporters stormed the U.S. Capitol on Jan. 6, Trump has for months agitated to regain the online megaphone that once blasted his voice around the world. In a presentation released Wednesday by his new media company, Trump Media & Technology Group, his team hailed the new social network as the first tentpole for a Trump-led media, news and Internet empire that would one day compete with Disney, CNN and Facebook.

But the site’s early hours revealed lax security, rehashed features and a flurry of bizarre design decisions. An open sign-up page allowed anyone to use the site shortly after it was revealed, sparking the creation of the “donaldjtrump” account and the pig posting. A Washington Post reporter was able to register and post under the account name “mikepence” without any stops in place. New sign-ups were blocked shortly after.

[Arazi]

8. Recced. Really important

[LetMyPeopleVote]

9. TFG's New Social Media Site Plans to Raise Money With Shell Company Scheme

SPACs are interesting animals where the investors form an acquisition company to buy an existing company or operations and in effect take such operations public without doing an IPO. According to a friend at a big frim, SPACs are sort of loss leaders for SEC corporate types because you are not filing financial statements and the other disclosures about the company/operating going public. Normally a SPAC acquires an operating company with revenues and assets. This SPAC is acquiring a start up operation that does not have a working website and no revenues or operations at a value that "something that surely wasn’t pulled out of the former president’s ass." TFG took the public company that owned his casinos into bankruptcy while taking out large bonuses for himself. This deal smells

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Former President Donald Trump, a white supremacist who barely knows how to use a computer, announced late Wednesday that he plans to launch a new social media platform next year called Truth Social, with beta testing opening up to select users in November. And while the site was almost immediately infiltrated by pranksters mere hours after the announcement—long before people were supposed to be allowed to even create accounts—that’s not the most interesting part of the story.

No, the most interesting thing about Trump’s planned social media platform is how it’s going to be used to make money. Because wherever Donald Trump goes, extremely shady business practices always follow. And it’s going to be very interesting watching MAGA investors almost certainly get fleeced by Trump’s new business endeavor, which is looking to go public through a special purpose acquisition company, or SPAC.

The business that’s launching Truth Social is called the Trump Media and Technology Group (TMTG), which has a business address listed as Mar-a-Lago but isn’t registered yet with the state of Florida, as far as Gizmodo can tell. TMTG is valued at $1.7 billion according to a very real figure tweeted by spokesperson Liz Harrington—something that surely wasn’t pulled out of the former president’s ass.

TMTG will be merging with a shell company called Digital World Acquisition Corp. for the sole purpose of getting listed on a stock exchange, according to the Wall Street Journal. That way, Trump Media and Technology Group gets to go public by piggybacking on a different company and Trump’s “media and technology” company gets to avoid a ton of regulatory hurdles that exist to keep companies somewhat transparent under the theory that investors are less likely to get screwed.

......Normally, we’d be extremely wary of shady SPAC deals with unproven companies, but this is a special situation. Anyone who invests in Trump or his shell company know exactly what they’re getting into. If you support former President Trump, we encourage you to dump all your money into Trump Media and Technology Group. You’ll get everything you deserve.

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