These investors are pouring $1 billion into Trump media

When former President Donald J. Trump’s fledgling social media company and its merger partner announced in December that they had secured $1 billion in additional private funding for the deal, it sparked speculation about the identities of the investors.

Who were the roughly three dozen investors betting on the success of the former president’s new venture? Were they big names on Wall Street? Political supporters of Mr. Trump? Were tech and media funds sold on the promise of a right-wing alternative to Twitter?

A draft document that was shared with The New York Times about the $1 billion investment, called “private investment in public equity” or PIPE, sheds some light. In such a deal, an investor exchanges cash for shares that are then registered by the company for sale on the open market.

The investors are mostly a mix of small and medium-sized hedge funds based in the United States and Canada, according to the document. The draft was distributed to investors on Tuesday, and two people briefed on the matter said a final version was expected to be submitted to regulators on Thursday, though the timing could change.

Hedge funds Pentwater Capital and Sabby Management are two of the biggest investors in the private placement, as The Times previously reported. Funds associated with Pentwater, a $10 billion hedge fund based in Naples, Florida, stand to gain the most shares through the deal, according to the draft document.

Other big investors include Anson Funds Management, Kershner Trading Americas, K2 & Associates, Yorkville Advisors, and MMCAP. Although not household names, some are well known in the hedge fund world for making PIPE investments, which often have lucrative terms. Many of Wall Street’s biggest hedge funds passed on the opportunity because they were worried about the optics of partnering with Trump.

At least two of the investors on the list did not yet know each other.

A great investor is an entity called Truth SPC. The name appears to be a reference to Truth Social, the Twitter lookalike that is a flagship product of Mr. Trump’s company, Trump Media & Technology Group. But online searches, including US corporate records, did not reveal any entity by that name.

Another big investor whose beneficial owner is unclear is called Red Rowan Investments. The company appears to have been incorporated in December in the Cayman Islands.

The $1 billion private placement is a critical financial element to the proposed deal between Trump Media and Digital World Acquisition, a “blank check” or special-purpose acquisition company that went public in September. Digital World raised nearly $300 million through its initial public offering.

Investors in the private placement are not required to put up any money until the Securities and Exchange Commission approves the merger. Once that happens, investors will collectively get tens of millions of shares in the post-merger company, according to the draft document.

The SEC is investigating whether some of the communications between Trump Media and Digital World before their deal was announced violated the rules.

Patrick Orlando, CEO of Digital World, did not respond to requests for comment, nor did Trump Media representatives.

Truth Social is off to a rocky start. Trump only recently began posting messages regularly to his nearly three million followers. He had almost 90 million followers on Twitter before the platform kicked him out last year.

Elon Musk, the billionaire businessman who recently made an offer to buy Twitter, has said he will allow Trump to return to the platform if the deal goes through. Trump said that he intended to remain on Truth Social. But a new license agreement Trump signed with Trump Media opens the door for him to also post political messages on Twitter if the social network lifts its ban.

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