Digital World (DWAC) Reveals PIPE Investors, Other Details in Latest S-1
by Nicholas Alan Clayton on 2022-05-27 at 12:01pm

Digital World’s (NASDAQ:DWAC) filed a new S-1 today, providing highly anticipated information into the investors of its $1 billion PIPE.

A total of 48 investors have subscribed to this PIPE, with ownership post-conversion of the Preferred Stock between 11,350,000 shares and 50,000 shares. This largest purchase comes from Truth SPC, an entity that would appear to have something to do with Truth Social, but is currently registered to a Kentucky PO box and represented for voting purposes by a certain Nathan Smith.

Same for Red Rowan Investments, which will own 10,000,000 shares post-conversion, but whose entity was registered on December 14, 2021, eight days after the PIPE was announced.

Overall, the majority of PIPE investors are, as has long been speculated, hedge funds, but some venture capital has also taken part. Alta Partners, a venture firm that primarily invests in healthcare is set to own 3,500,000 shares post-conversion.

To refresh, according to Digital World’s original 8-K, the PIPE shares are to be registered no later than the closing date of the combination. Meaning, the SPAC intends to register the shares ahead of time during the proxy review period so they are freely tradable immediately at closing.

Typically, PIPE shares are filed to be registered after the deal has closed effectively creating a “lock-up period” for PIPE investors while the shares go through the registration process.  However, considering that there is also no stated lock-up on PIPE investors and those shares will already be registered, this could result in a large amount of selling pressure on the stock.

Other details in this S-1 also stand out. The risk factors sections of these documents can sometimes present fairly vivid downside scenarios because the legal teams want to be thorough in eliminating potential litigation risk. Still, some stated risk factors can be revelatory, some of which we have highlighted before. Another risk of note is enumerated as: “The members of TMTG’s management team have extensive experience leading complex organizations. However, they have limited experience managing a publicly-traded company, interacting with public company investors, and complying with the increasingly complex laws, rules and regulations that specifically govern public companies.”

In other words, “just so you know, we may not be great at this public company stuff”?

PIPE Investors below:

 

Recent Posts
by Nicholas Alan Clayton on 2024-02-21 at 7:53am

At the SPAC of Dawn PHP Ventures (NASDAQ:PPHP) provided an update this morning on its combination with modular construction firm Modulex in the form of a refreshed investor presentation. The parties have been quiet on the news front since they announced the combination over a year ago in December 2022, but a few key facts...

by Nicholas Alan Clayton on 2024-02-21 at 6:19am

DT Cloud Acquisition Corporation (NASDAQ:DYCQU) announced the pricing of its $60 million IPO and its units are expected to begin trading on the Nasdaq under the symbol “DYCQU” today, Wednesday, February 21, 2024. The new SPAC plans to focus its target search on a company that is under-performing due to a temporary dislocation in the...

by Nicholas Alan Clayton on 2024-02-20 at 2:58pm

SDCL EDGE (NYSE:SEDA) has entered into a definitive agreement to combine with copper alloy manufacturer cunova at an enterprise value of $736 million, or 9.4x its 2023E adjusted EBITDA. Osnabrück, Germany-based cunova manufactures copper casts, fittings and conductivity products for the industrial, defense and aerospace sectors. The combined company is expected to trade on the...

by Nicholas Alan Clayton on 2024-02-20 at 1:31pm

Deals and Funding Power & Digital (NASDAQ:XPDB) has secured a $10 million investment from Rice Investment Group into its combination with HVAC technology firm Montana under undisclosed terms. two (NYSE:TWOA) has secured a $15 million PIPE at $10 per share for its combination with LatAm Logistic Properties. News and Rumors PR: Adtech firm Banzai International...

by Nicholas Alan Clayton on 2024-02-20 at 10:29am

Acri Capital (NASDAQ:ACAC) has entered into a definitive agreement to combine with electronics manufacturer Foxx for $50 million in share compensation. Texas-based Foxx provides communication terminals and IoT services to the telecom sector as well as consumer electronics for retail buyers. The combined company is expected to trade on the Nasdaq once the deal is...

logo

Copyright © 2023 SPACInsider, Inc. All Rights Reserved