The new social-media venture from former President Donald Trump is looking to raise up to $1 billion by selling shares to hedge funds, according to a report.
Trump Media & Technology Group is already in line to receive $293 million if its deal to debut publicly through a SPAC merger with Digital World Acquisition (DWAC) goes through.
But Trump Media is now seeking to raise an additional $1 billion at a valuation of close to $3 billion, sources told Reuters.
Digital World shares at last check jumped 7.9% to $5.
Digital World shares were valued at $10 each in the deal with Trump Media. Now, Trump Media is looking to secure a private investment in public equity, or PIPE, that would value Digital World shares closer to its recent share price.
The former president does have some baggage that could complicate his fund raising.
Saba Capital Management and Lighthouse Investment Partners, hedge funds that had backed Digital World, have said they sold their shares in recent weeks.
“Lighthouse was not aware of the pending merger and no longer holds unrestricted shares of the SPAC," the fund said in a statement.
There are also regulatory risks as U.S. Sen. Elizabeth Warren (D-Massachusetts), a fervent Trump antagonist, asked Securities and Exchange Commission Chairman Gary Gensler to investigate the planned merger for potential violations of securities laws regarding disclosure.
But Trump has been personally involved in the fund-raising activities, according to Reuters. He has been calling some investors to ask them to commit more than $100 million to the PIPE.
Trump decided to start his own social media platform after being removed from Facebook (FB) - Get Meta Platforms Inc. Class A Report and Twitter (TWTR) - Get Twitter, Inc. Report. He had 89 million followers on Twitter and 33 million on Facebook.
Editor's note: story has been updated as Lighthouse says the sale is not related to any pending transaction with the former president.