We've got two big MEME SPAC deals in play right now. I am working on a long note regarding Rumble/CFVI, which will go out late Sunday or early Monday. Meanwhile, it looks like $DWAC, AKA Trump Media and Technology (TMTG), has managed to get a stay of execution.
$DWAC & Trump Media
Despite being out flogging for votes, the company could not get a quorum and had to go back to the drawing board. They decided to kick in another payment to extend the deadline three more months to December 8, 2022. They have an option to do it once more and push it to March 8, 2023.
The shareholder vote has been pushed to October 10, 2022, and they also hope to get approval for two more three-month extensions to get them to September 2023.
A SPAC this popular with retail traders presents a challenge regarding the shareholder vote. With a record date of August 14th, most traders don't even know if they held it then. I have not seen any numbers on how many shareholders they are in the vote so far, but by scheduling the next vote for October 10th, one would think they have a shot at it.
DWAC has the drawback of being in the crosshairs of the SEC, which adds another challenge to a successful outcome. Given the impotence of the SEC in dealing with what appear to be blatant manipulations like $BBBY, you have to wonder what they will bring to this fight over DWAC.
It's hard to believe this stock traded north of $90/share. It's $24 now with trust at $10.30. There are a few things to be reminded about regarding DWAC:
- There is that $1B PIPE of preferred shares with a conversion price of $33.60. The PIPE comes with some provisions around anti-dilution, stock splits and future fundraising.
- There is a sizable 40M share earnout in the deal that trigger at $15, $20 and $30 share prices. Combined with the PIPE conversion price and warrants the share count ranges from a low of 125M to 194M. At $24 that's a market cap range of $3B to $4.6B the EV would be less $1B plus the warrant proceeds.
- TMTG plans to use the Rumble platform as their advertising platform (and likely source for the majority of their revenue.) This creates a little entanglement for CFVI Rumble investors to consider. Rumble is building their business independent of TMTG but with $1B in potential money to spend they would be a significant swing customer if the deal gets done.
- The SEC is investigating the DWAC TMTG deal. As recently as June the company announced additional subpoenas supporting federal grand jury in the Southern District of NY, the DoJ and the SEC. These outcome of these proceedings is unknown but it elongates the timeframe and includes a broad range of potential outcomes that investors may wish to consider.
- Finally how Donald Trump decided to proceed in the upcoming presidential election and what those results are may impact both TMTG and Rumble.
All DWAC holders can do now is watch for further news around the legal investigations and see what the vote on October 10th brings.
DWAC has options so investors may wish to consider using them to tailor their risk/reward profile in the stock given the uncertainty around timeframes and outcomes.
$CFVI & Rumble Vote
On Thursday, September 15th at 10 a.m. ET CFVI will have their special meeting. Votes are for shareholders of record on 7/25/2022. The redemption deadline is 9/13/2022. The shares closed above trust at $12 on Friday. The stock has gone up into the vote based on recently reported user metrics and some popular new people joining the platform.
Getting a quorem might be a challenge for CFVI too but we won't know until Thursday. The shareholder meeting will be virtual. I'll be listening to the live webcast.
I've spent more time looking at Rumble and it's deserving of a full analysis which I will pull together this weekend and shoot to publish on Sunday night to give investors some thoughts going into what should be a volatile week for the stock.
They recently published an updated investor presentation and filed it with the SEC.
CFVI has options too so they are a way to adjust for risk/return.
If you are not yet a SPACvest member and you care about CFVI you might want to sign up to be sure you get the email notifications this week.
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