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Former President Donald Trump’s media company thinks it can attract 10 million paying subscribers to a new streaming service, and that users will be willing to pay a monthly fee “closer to that of Netflix given President Trump’s highly enthused base.”
But first, it will have to navigate a federal investigation.
According to documents filed by Digital World Acquisition Company (the SPAC Trump’s company intends to merge with) Monday, both firms are facing investigations by the SEC and FINRA.
The FINRA investigation predated the Trump merger announcement (it’s a “review of trading,” per the company), but the SEC document request came last month. The companies say they are cooperating with the investigations.
“In early November 2021, DWAC received a voluntary information and document request from the SEC, which sought, inter alia, documents relating to meetings of DWAC’s Board of Directors, policies and procedures relating to trading, the identification of banking, telephone, and email addresses, the identities of certain investors, and certain documents and communications between DWAC and TMTG,” according to the regulatory filing. “According to the SEC’s request, the investigation does not mean that the SEC has concluded that anyone violated the law or that the SEC has a negative opinion of DWAC or any person, event, or security.”
The disclosure of the investigations comes after DWAC announced that it had secured an additional $1 billion in PIPE financing, which is meant to supplement the money raised in the IPO. In its filing about the new financing, TMTG also released a new investor presentation, with details about the company, its structure and ambitions.
That includes the streaming service details, which adds that the man leading it, game show producer Scott St. John, will develop news, documentaries, sports programming and “non-woke” entertainment. TMTG thinks it could reach 40 million users by 2026.
But the first product will be a social network, Truth Social, which appears to be very similar to Twitter. TMTG says it thinks it can attract 15 million monetizable users, and that if it can add users beyond Trump’s base (an open question), it could become far larger. Ultimately, the company projects that Truth Social will have 81 million users by 2026, based somewhat curiously on a Politico poll of registered U.S. voters.
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