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Stymied before, Trump finds backing for his own media venture

  • >> Jeremy W Peters and David Enrich, The New York Times
    Published: 2021-10-21 10:57:54 BdST

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Former US President Donald Trump speaks during a rally at the Iowa States Fairgrounds in Des Moines, Iowa, US, October 9, 2021. REUTERS/Rachel Mummey

Former President Donald Trump said Wednesday that he had lined up the investment money to create his own publicly traded media company, an attempt to reinsert himself in the public conversation online from which he has largely been absent since Twitter and Facebook banned him after the Jan 6 insurrection.

If finalised, the deal could give the new Trump company access to nearly $300 million in spending money.

In a statement announcing the new venture, Trump and his investors said that the new company would be called Trump Media & Technology Group and that they would create a new social network called Truth Social. Its purpose, according to the statement, is “to create a rival to the liberal media consortium and fight back against the ‘Big Tech’ companies of Silicon Valley.”

The only US president to be impeached twice, Trump has had an active presence in conservative media since he left office. But he lacks the ability he once had to sway news cycles and dominate the national political debate. He filed a lawsuit this month asking Twitter to reinstate his account.

The announcement Wednesday also pointed to a promised new app listed for presale on the App Store, with mock-up illustrations bearing more than a passing resemblance to Twitter.

Details of Trump’s latest partnership were vague. The statement he issued was reminiscent of the kind of claims he made about his business dealings in New York as a real estate developer. It was replete with high-dollar amounts and superlatives that could not be verified.

Rumours of Trump’s interest in starting his own media businesses have circulated since he was defeated in the November 2020 election. None materialised. Despite early reports that he was interested in starting his own cable channel to rival Fox News, that was never an idea that got very far given the immense costs and time needed to put into it. A close adviser, Jason Miller, started a rival social media platform for Trump supporters called Gettr. But Trump never signed on.

In a statement Wednesday night, Miller said of his and Trump’s negotiations, “We just couldn’t come to terms on a deal.”

Trump’s partner is Digital World Acquisition, a special purpose acquisition company, or SPAC. These so-called blank-check companies are an increasingly popular type of investment vehicle that sells shares to the public with the intention of using the proceeds to buy private businesses.

Digital World was incorporated in Miami a month after Trump lost the 2020 election.

The company filed for an initial public stock offering this spring, and it sold shares to the public on the Nasdaq stock exchange last month. The IPO raised about $283 million, and Digital World drummed up another $11 million by selling shares to investors through a so-called private placement.

Digital World is backed by some marquee Wall Street names and others with high-powered connections. In regulatory filings after the IPO, major hedge funds including DE Shaw, Highbridge Capital Management, Lighthouse Partners and Saba Capital Management have reported owning substantial percentages of Digital World.

Digital World’s CEO is Patrick F Orlando, a former employee of investment banks including the German Deutsche Bank, where he specialised in the trading of financial instruments known as derivatives. He created his own investment bank, Benessere Capital, in 2012, according to a recent regulatory filing.

Digital World’s chief financial officer, Luis Orleans-Braganza, is a member of Brazil’s National Congress.

Orlando disclosed in a recent filing that he owned nearly 18% of the company’s outstanding stock. Orlando and representatives for Digital World did not immediately respond to requests for comment.

This is not Orlando’s first blank-check company. He has created at least two others, including one, Yunhong International, that is incorporated in the offshore tax haven of the Cayman Islands.

At the time that investors bought shares in Digital World, it had not disclosed what, if any, companies it planned to acquire. On its website, Digital World said that its goal was “to focus on combining with a leading tech company.”

At least one of the investors, Saba Capital Management, did not know at the time of the initial public offering that Digital World would be doing a transaction with Trump, according to a person familiar with the matter.

Trump, who has repeatedly lied about the results of the 2020 election while accusing the mainstream news media of publishing “fake” stories to discredit him, leaned hard into the notion of truth as his new company’s governing ethos.

“We live in a world where the Taliban has a huge presence on Twitter, yet your favourite American president has been silenced,” Trump said in his written statement, vowing to publish his first item soon. “This is unacceptable.”

© 2021 The New York Times Company