The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019 {{ new Date().getDay() }}

Patrick Orlando

On top of his expanding legal troubles, former President Donald Trump’s finances have evidently taken a hammering, as a blank-check company looking to acquire his embattled social media platform changed its address to a mailbox at a UPS store.

Digital World Acquisition Corporation, a special purpose acquisition company, or SPAC, that announced a merger with Trump’s start-up, Trump Media & Technology Group — providing the former president’s Truth Social, a failing Twitter clone, with up to $1.3 billion in capital and a stock market listing — has fallen on hard times, threatening its financial capability to complete the takeover.

According to theFinancial Times, the listed address of DWAC’s headquarters — formerly a WeWork office in Brickell City Centre, Miami, Florida — was changed in a mid-August Securities Exchange Commission (SEC) filing to 3109 Grand Avenue in Miami: a UPS store between an Italian restaurant and a nail salon.

The unit listed in the address, #450, corresponds to a mailbox number, the FT report, citing a search of the address and a verbal confirmation from a “person who answered the phone at the UPS Store on Monday.”

DWAC and a business with ties to its owner, Patrick Orlando, have agreed that the latter would provide the SPAC with office space and administrative support for $15,000, a seismic amount compared to the $50 per month UPS charges businesses to rent its mailboxes, the FT noted in its report.

Investor Exodus

The address change follows a DWAC regulatory filing with regulators that showed investors exiting in droves, pulling out $138.5 million of the $1 billion private equity pledged.

The contract obligating investors to pour their funds into Trump Media after the merger expired last Tuesday, allowing them to pull out of the deal, the filing said, according to CNBC. A former investor told CNBC that it had pulled out of the deal because of the company’s many legal woes.

According to the Washington Post, DWAC’s financial base had eroded so significantly that it was scheduled for liquidation earlier this month, as its investors seemed unlikely to permit a one-year extension of the deadline for the acquisition of Trump Media.

The Post revealed in its report that Orlando intervened in a last-ditch effort to save the deal, postponing a long-awaited corporate meeting, where a vote would be held, to October 10, as the company scrambled to amass shareholder support.

DWAC claimed in its filings that it could obtain enough funds to hold out for three more months to seal the deal without investor support. However, the company “could be forced to liquidate, returning all of its money to investors and leaving Trump’s operation with nothing” if it failed, per the Post.

Trouble With The Law

In late August, after the FBI raid of Trump’s Mar-a-Lago home, DWAC warned in a filing that it would suffer if the former president “becomes less popular or there are further controversies that damage his credibility.”

The company itself is under intense scrutiny by the SEC and a New York grand jury for its alleged shady dealings and merger with Truth Social. In a June regulatory filing, DWAC revealed that its directors had received subpoenas, leading to a spate of resignations.

The company had urged the SEC to “wrap up its probe” in a reprint on an item from a pro-Trump blog post, as its folding would send Trump’s company, which is running off of loans spiraling into limbo.

Trump tried to downplay the issue earlier this month, writing on Truth Social, “Truth is doing well… I don’t need financing, ‘I’m really rich!’.”

Neither Orlando nor representatives for DWAC responded to multiple outlets’ requests for comments.

Advertising

Start your day with National Memo Newsletter

Know first.

The opinions that matter. Delivered to your inbox every morning

{{ post.roar_specific_data.api_data.analytics }}