Trump Media, SPACs, and the Fine Art of Skipping the Line to Go Public

5 min readNov 6, 2024

So here we are, folks — March 2024, and Trump Media & Technology Group Corp. (TMTG) hits the NASDAQ like it’s the hottest act since the dot-com boom. They didn’t go the old-fashioned IPO route, oh no. They pulled a classic Wall Street trick: the SPAC merger. That’s right, TMTG cozied up with Digital World Acquisition Corp. (DWAC), and — poof! — they’re public, slick as ever. But hold on: What’s a SPAC? And why does this whole thing smell a little like fast food for Wall Street? Let’s dig into it.

SPACs 101: Wall Street’s “Mystery Boxes”

A SPAC, or Special Purpose Acquisition Company, is basically a shell corporation looking for a real company to merge with. It’s a setup where the investors hand over their money without even knowing where it’s going. They call them “blank check companies” for a reason — no business plan, no products, just cash and a dream. It’s the stock market’s version of “Buy now, regret later.”

And why do they do it? Speed, baby! You go public faster than a pizza delivery. Traditional IPOs? Too slow, too many questions. With a SPAC, it’s as if you took the express lane, bypassed the toll, and skipped the line at the buffet. TMTG liked that part, I bet.

How Trump Media Fast-Tracked to NASDAQ

Back in 2021, TMTG said, “Let’s merge with DWAC!” and just like that, it was off to the races. Now, SPACs give companies quick access to public cash and cut a lot of corners. So here comes TMTG, racing past regulatory speed bumps, and by March 2024, they’re live on NASDAQ under the ticker “DJT.” Pretty slick, right? But hold up — this easy path has a few potholes.

The “Pros” (If You Can Call Them That)

1. Speed to Market

SPACs mean companies go public fast. Like, Usain-Bolt-fast. For TMTG, this meant hitting the stock exchange without a long engagement period.

2. Less Scrutiny

Less scrutiny sounds great — unless you’re the one investing. Fewer regulatory hoops means less hassle, sure. But it also means you’re buying the mystery meat in the cafeteria with no label.

3. Predictable Fundraising

They raise capital right off the bat. No roadshows, no book-building, just one big cash dump, and everyone gets to ride along.

The “Cons” (Oh, There’s Always a Catch!)

SPACs might be the express lane, but it’s also the freeway to Fraud City if you’re not careful. Here’s what they don’t advertise on the ticket:

1. Due Diligence? What Due Diligence?

SPACs have a knack for cutting corners on the details. Traditional IPOs put you through the wringer — every number, every forecast, every flaw, out in the open. SPACs? Not so much. It’s the difference between a deep dive and a kiddie pool.

2. Misaligned Incentives

SPAC sponsors get their payday as soon as the merger’s done, whether the company sinks or swims. Sponsors make bank; investors might get stuck holding the bag. Now, is that a recipe for smart deals? Not exactly.

3. Financial Projections with a Side of Fantasy

SPACs let companies hype up future profits like a carnival barker. “Step right up, folks, and witness the future of industry!” But projections aren’t promises, and sometimes they’re barely educated guesses. The SEC’s been eyeing these “forecasts” like a hawk.

4. Bigger Targets for Regulators

The SEC, sniffing out funny business, has cracked down on SPACs, including some big-name cases. SPACs might not always get the red-carpet treatment they expect, and the more the SEC pokes around, the more potential fraud gets exposed.

The TMTG-DWAC Saga: A Comedy of Errors

Take TMTG’s cozy deal with DWAC. A case study in “Whoops.” By 2023, the SEC was on DWAC like white on rice, charging them with misleading disclosures. Turns out, there were a few gaps in the honesty department. And with big names attached, you can bet the scrutiny was dialed up to eleven.

Investors, Beware: How to Play Defense in the SPAC Game

If you’re still feeling brave enough to play in SPAC land, here’s the playbook:

1. Demand Due Diligence

Don’t just take a peek; do the whole forensic audit. It’s your money — dig in and make sure you’re not buying snake oil.

2. Align Incentives

If the sponsors don’t have skin in the game, walk away. When they win whether you win or lose, that’s not a fair fight.

3. Keep an Eye on the Regulators

The SEC is your friend here. If they’re circling, that’s your cue to pay attention. If you see smoke, there’s probably a bonfire waiting to ignite.

Wrapping It Up: SPACs Are No Free Lunch

So, here’s the scoop: SPACs like TMTG’s might be quick, but quick doesn’t mean safe. They’re flashy, fun, and might look like the best ride in town. But don’t be fooled — there are risks, and they’re not small. You want a good deal? Go slow, ask questions, and don’t settle for mystery meat.

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