The investment comes with a number of stipulations, including that no further shares being issued by the company until 90 days after the preferred shares are registered, sold, or eligible to be sold, or, until after the one year anniversary of the closing that no PIPE investor is an affiliate of the company – the latter of which suggests certain insiders participated in the transaction.
The conversion price however does have downward revisions embedded within, with such conversion price being revised to the ten day volume weighted average price of the equity, less a 40% discount, after the closing of the transaction with TMTG, if that figure is lower than the current conversion price.
#PIPE IN SPAC TRANSACTION FULL#
In total, the full investment is expected to convert into 29.8 million common shares. The investors are to purchase each share for a figure of $1,000 per share, with the shares having an initial conversion price of $33.60 per share. The company has secured a total investment of $1.0 billion from certain undisclosed institutional investors, whom will make the investment via Series A Convertible Preferred Stock. The firm this morning filed documents with the SEC indicating that the company has secured a PIPE investment in connection with its SPAC transaction. It appears that significant demand for the Donald Trump associated Digital World Acquisition Corp (NASDAQ: DWAC) still exists in the market.
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