What happened
Shares of Digital World Acquisition (NASDAQ:DWAC) soared 357% on Thursday after the special purpose acquisition company (SPAC) announced a deal to merge with Trump Media & Technology Group.
So what
Should it receive shareholder and regulatory approval, the merger would allow Trump Media & Technology Group to become a publicly traded company. The deal values the business at up to $1.7 billion when including earn-out incentives.
Trump Media & Technology Group said it plans to launch a new social network 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."
Digital World Acquisition's stock surged on news of its deal with President Trump. Image source: Getty Images.
Truth Social, as the network will be called, is slated to debut in beta form in November, with a nationwide rollout planned for the first quarter of next year.
Donald Trump, who will be chairman of Trump Media & Technology Group (TMTG), said in a press release:
I 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. I am excited to send out my first truth on Truth Social very soon. TMTG was founded with a mission to give a voice to all.
Now what
Digital World Acquisition intends to use its roughly $293 million in cash to build and grow Truth Social. That may not be enough. The new network will compete with social media titans such as Facebook (META 0.14%) and Twitter (TWTR), which collectively spend billions of dollars each year to scale their already massive networks.
Still, the former president has built a loyal following, and many of his supporters are likely to follow him to his new platform.
