Former US President Donald Trump is set to launch his own social media company in hopes of taking on the major tech players.
Digital World is not a company which does anything itself, but rather its whole business is to merge or acquire other companies and help them go public without an initial public offering.
Also read: The problem with Trump’s new media company
But, despite the company not really doing anything itself, and Trump's foray into social media having not yet been established, investors seemed keen to jump on board.
In fact, Digital World soared over 400 per cent on the news it would be merging with Trump's new venture.
Here is what you need to know.
Trump announces social media push
TMTG said it will be launching the platform called TRUTH Social as a means to take on the current social media giants.
“TMTG's mission is to create a rival to the liberal media consortium and fight back against the ‘Big Tech’ companies of Silicon Valley, which have used their unilateral power to silence opposing voices in America,” TMTG said.
Trump said he created TRUTH Social and TMTG to “stand up to the tyranny of Big Tech”.
“We live in a world where the Taliban has a huge presence on Twitter, yet your favorite American President has been silenced. This is unacceptable,” Trump said in a statement.
“I'm excited to soon begin sharing my thoughts on TRUTH Social and to fight back against Big Tech. Everyone asks me why doesn’t someone stand up to Big Tech? Well, we will be soon!”
Partnership with Digital World
Digital World is what is known as a SPAC, or a special-purpose acquisition company.
Essentially, these companies are established to list the shares of a private company without that company having to go through their own initial public offering.
So, now that Digital World and TMTG have merged the SPAC will change its name and all other details to that of the company it acquired - in this case TMTG.
“Digital World was formed to create public shareholder value and we believe that TMTG is one of the most promising business combination partners to fulfill that purpose,” CEO of Digital World Patrick Orlando said.
“Given the total addressable market and President Trump’s large following, we believe the TMTG opportunity has the potential to create significant shareholder value.”