Former president Donald Trump announced earlier this week that he is launching his own media company, which will include a social media platform and be partially funded by a merger with a SPAC. One of the SPAC’s investors, however, is already out of the picture.
The New York Times revealed Thursday night that one of the biggest investors in the Digital World SPAC was Saba Capital, a $3.5 billion hedge fund. Its founder and manager, Boaz Weinstein, told the paper that once his company was made aware that the SPAC it had invested in was funding Trump Media & Technology Group, it sold much of its stake Thursday morning, netting a small profit.
“Many investors are grappling with hard questions about how to incorporate their values into their work,” Weinstein said. “For us, this was not a close call.”
Those who invest in a SPAC are not aware of how their money will ultimately be spent. SPACs, or “blank-check companies,” go public immediately, solicit funds from backers and then go find companies with which to merge.
Digital World Acquisition Corp. was incorporated in Miami, Fla., in December 2020 — a month after Trump lost the election. The company, owned by CEO Patrick F. Orlando, filed for initial public offering at some point last spring, and in September raised approximately $282 million, according to an SEC filing, from that IPO. An additional $11 million was raised from selling to private investors. The company is backed by several big hedge funds that own significant percentages.
If a merger between Digital World and Trump Media & Technology Group is approved, the newly formed media company will have close to $300 million to work with, in addition to whatever the company is valued at.