SPACInsider Logo
Digital World (DWAC) Loses $138.5M of PIPE Investors
by Kristi Marvin on 2022-09-23 at 7:10pm

Digital World (NASDAQ:DWAC) revealed in an 8-K filed this afternoon that $138.5 million worth of investors in their $1 billion PIPE have opted to not participate going forward.

The original $1 billion convertible preferred had an Outside Date of September 20, 2022, at which time any of the PIPE investors could terminate their respective subscription agreements. This leaves $861.5 million currently subscribed, however, remaining investors still have the ability to file termination notices in the future. Today’s 8-k unfortunately did not note which investors have opted to terminate and how many investors that included. We would need to wait for any forthcoming proxy filings to see which remain.

However, what was noted in today’s filing was the following:

“Additionally, as reported in Digital World’s definitive proxy statement dated August 25, 2022, relating to its special meeting of stockholders, currently adjourned to October 10, 2022, it is possible that the parties will restructure the PIPE or renegotiate such arrangements in view of the PIPE closing conditions, evolving market and regulatory conditions.

As shown above, this statement regarding restructuring or renegotiation was also included in the August 25th filing, but it has apparently been included again today for emphasis.  This may or may not be a case of “Chekov’s gun“, but there’s definitely the sound of some bullets rattling around in a chamber somewhere.

As such, FT has already reported that negotiations were purported to be in full swing.  Primarily around the preferred stock conversion price, which gets adjusted if the 10-day VWAP on the share price is below $56. The rumored negotiations involve a new floor conversion price of $2.00, down from the original $10.00.  However, this seems unrealistic from both an TMTG optics viewpoint (Trump will hate it) and from a public SPAC shareholders viewpoint. The impact of dilution from a $2.00 floor would most likely negatively impact the DWAC current share price which has already come down significantly from it’s 52-week high of $175.00.  Today, DWAC closed at $16.50.

Having said that, this deal has had more left turns than a doorknob.  DWAC also has their extension vote on the horizon and it is currently scheduled for October 10th. Keep in mind that TMTG is locked into this deal until at least December 8th. Between now and then, more DWAC news seems highly likely.

 

 

Recent Posts
by Kristi Marvin on 2023-04-01 at 10:51am

Terms Tracker for the Week Ending March 31, 2023 Welcome to our weekly column where we discuss the findings from our IPO terms tracker based on the previous week’s pricings. Filings continue to remain quiet, but SPACs did manage to price two more IPOs this week with TMT Acquisition Corp (Nasdaq: TMTCU) and Trailblazer Merger...

by Marlena Haddad on 2023-03-31 at 5:15pm

Hudson Acquisition I Corp. (NASDAQ:HUDA) announced that it has signed a non-binding letter of intent (LOI) to combine with a pre-clinical-stage biotechnology company. The SPAC did not provide many details on the unnamed target, but disclosed that the biotech company is focused on developing intranasal preventives for major disease-causing respiratory viruses. As a condition to the target...

by Nicholas Alan Clayton on 2023-03-31 at 1:25pm

Heading into April, SPACs are to see eight sponsors and 11 de-SPAC’d companies freed from lock-ups and ready to trade. Most of these lock-up expirations are loaded into the final week of the month, but those hitting this milestone already next week include some of the more interesting transactions of the crop. In particular, MoonLake...

by Marlena Haddad on 2023-03-31 at 11:39am

Below is a daily summary of links to the latest SPAC news and rumors gathered across the web.  Latest SPAC News:  Shares of Digital World jump after Trump’s indictment, and pair of Delaware Chancery court decisions deny motions to dismiss SPAC shareholder’s fiduciary breach claims Trump-Tied SPAC’s Shares Jump After Historic New York Charge The...

by Kristi Marvin on 2023-03-30 at 7:37pm

Ares Acquisition Corporation II (NYSE:AACT) filed its S-1 yesterday afternoon for a $400 million IPO, marking the second SPAC to file for an IPO in March and the largest since December 20, 2021, when Gores Holdings X Inc. filed for a $725 million SPAC. Ares II intends to focus its search on an established target...

Privacy Policy|Terms Of Use
Copyright © 2023 SPACInsider, Inc. All Rights Reserved