Trump Media asks hedge funds to invest another $1 billion

Donald Trump’s new media venture, Trump Media and Technology Group, has thus far produced nothing, but it’s very eager to off another 10 digits’ worth of shares to interested hedge funds, according to company insiders who spoke to Reuters.

The two insiders tell Reuters that Trump Media is attempting to raise another $1 billion by pitching shares to Wall Street investors and the wealth management offices for rich families at “several times the valuation” they commanded back in October, when Trump Media merged with a SPAC called Digital World Acquisition Corp.

Trump has positioned Trump Media as a bulwark that will “stand up to Big Tech,” most of whose platforms have blocked him for repeated terms-of-use violations. Trump Media’s crown jewel is a supposed Twitter-killer that’s been christened Truth Social. Its app is reportedly in development. However, the company just missed the very first deadline that it set—November 30—for its initial product launch. (“TRUTH Social is now available for PreOrder in the Apple App store,” it announced in October. “TRUTH Social plans to begin its Beta Launch for invited guests in November 2021.”)

It’s been reported that Trump Media stands to receive $293 million once it lists on Nasdaq through Digital World. But that was at a valuation of around $1 billion-ish. It’s now hoping to reach a valuation of closer to $3 billion, by adding new investors through a so-called PIPE deal (private investment in public equity). According to Reuters’ sources, this much higher valuation will “reflect Digital World’s share rally” when stocks initially surged by 1,750%. Reuters calls this the clearest indication yet that Trump’s team is betting it can leverage the “market euphoria around their venture,” as opposed to offering an actual business that is what you might call “up and running.”

Besides missing Truth Social’s launch deadline, Trump Media has also been accused of violating the terms of use for the very software its social-media platform is built on, and also potentially committing “serious securities violations” around disclosure. Still, Reuters says that, right now, Trump Media is on a “road show,” asking investors to commit $10 million to $20 million to the PIPE. The former president is reportedly on his own phone, meanwhile, calling up people and suggesting they invest at least $100 million.