{ "docId": "019dd923-622c-750b-8b98-185c8a5e84a0", "docSlug": "dbd70945c810", "documentTitle": "Digital World Acquisition Corp (DWAC)", "authorId": "53_Kerrisdale_Capital", "authorName": "Kerrisdale Capital", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2022-04-01 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 15, "pageCount": 27, "prevPage": 14, "nextPage": 16, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "dense", "nDataPoints": 0, "notes": "This is a text-heavy research note slide detailing a timeline of events to suggest potential misconduct.", "elementsJson": [ "paragraph", "quote_block" ], "metadataConfidence": 0.9, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-185c8a5e84a0/15", "deckHref": "/decks/019dd923-622c-750b-8b98-185c8a5e84a0", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-185c8a5e84a0.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-185c8a5e84a0#slide-15", "components": [ { "bbox": null, "kind": "callout", "text": "The fact that BCAC's purported discussions with TMTG concluded exactly one week before DWAC had its IPO seems too convenient to be a coincidence.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-3f41-721f-9e58-1fa7f23e8ba8", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.155, "w": 0.764, "x": 0.118, "y": 0.795 }, "kind": "paragraph", "text": "Post-IPO, DWAC's rush to get a fully executed merger agreement signed with TMTG is almost palpable. (And understandable, given reports that Trump was considering multi-million dollar offers to become the marquee name associated with several alternative right-leaning social media companies instead of trying to launch his own.) On September 27, 2021 – just 19 days after DWAC's IPO – Orlando and Trump sign an LOI reflecting plans to merge TMTG and DWAC. Less than a month later, on October 20, 2021, exactly six weeks after DWAC had its IPO, Orlando and Trump met in Florida and signed the definitive DWAC-TMTG merger agreement. Again, it strains credulity to think that Orlando could accomplish all that in just six weeks, without the benefit of the months-long process that BCAC allegedly had just completed.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "17003f24-50d0-409a-9dbc-d787337a3b6a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.055, "w": 0.764, "x": 0.118, "y": 0.955 }, "kind": "paragraph", "text": "The only defense to allegations that DWAC misled in its S-1 that we have come across so far comes from TMTG's then-Chief Legal Officer who had said that the April 2021 video conference was \"strictly discussions between Trump Media and [BCAC], another SPAC that Mr. Orlando ran. Any reference to the contrary is false and defamatory[.]\"", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "24357226-1910-4147-b8c2-a1117643b756", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.135, "w": 0.764, "x": 0.118, "y": 0.435 }, "kind": "paragraph", "text": "The inclusion of this added disclaimer is puzzling and a potential red herring. It seems subsumed within DWAC's earlier, broader statement that it had not selected any specific merger target and had not, directly or indirectly, engaged in any substantive discussions with any merger target. By saying, \"We haven't been in contact with anyone at all, and we definitely haven't been in contact with TMTG,\" it seems as though DWAC doth protest too much, implying that perhaps it was growing concerned about its pre-IPO contact with TMTG.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ae1eefe7-1e6e-4ee2-9d1a-f937ea540201", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.175, "w": 0.764, "x": 0.118, "y": 0.255 }, "kind": "paragraph", "text": "On August 10, 2021, DWAC filed its third amended S-1. In addition to the \"no discussions with target companies\" language quoted above, DWAC inserted for the first time an additional, very unusual statement: We have not contacted any of the prospective target businesses that [BCAC] or [Orlando's third SPAC] had considered and rejected. We do not currently intend to contact any of such targets; however, we may do so in the future if we become aware that the valuations, operations, profits or prospects of such target business, or the benefits of any potential transaction with such target business, would be attractive. (p.7)", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "b6a49f8a-a09d-4860-9dbf-2fb8b703c3f8", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.215, "w": 0.764, "x": 0.118, "y": 0.575 }, "kind": "paragraph", "text": "During the summer of 2021, Orlando and his SPAC factory team were occupied with much more than DWAC's IPO filings. According to BCAC's affiliate's S-4, from early June through late August 2021, BCAC (which Orlando controlled and oversaw in every meaningful way) purportedly conducted due diligence on TMTG and even began drafting a definitive merger agreement. Effective September 1, 2021, however, BCAC terminated negotiations with TMTG. The fact that BCAC's purported discussions with TMTG concluded exactly one week before DWAC had its IPO seems too convenient to be a coincidence. This fact, combined with our understanding that both BCAC and DWAC were entirely subject to Orlando's control, implies Orlando may have used BCAC and its alleged activities as a placeholder of sorts, to disguise the fact that DWAC was essentially engaged in prohibited merger negotiations prior to its IPO.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ce749d7d-b1fd-41ec-8f59-7dc9732de4dd", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.155, "w": 0.764, "x": 0.118, "y": 0.095 }, "kind": "paragraph", "text": "In July 2021, DWAC twice amended its S-1. Notably, DWAC's second S-1, filed on July 8, 2021, announced without explanation a new, more ambitious IPO goal of $300-$350 million, presumably to satisfy TMTG's needs. Predictably, each DWAC filing repeated the same statement that DWAC had \"not selected any specific business combination target and ... ha[d] not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.\"", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f4a1b37a-1bb3-45d2-810e-880c9fd13965", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "We have not contacted any of the prospective target businesses that [BCAC] or [Orlando's third SPAC] had considered and rejected. We do not currently intend to contact any of such targets; however, we may do so in the future if we become aware that the valuations, operations, profits or prospects of such target business, or the benefits of any potential transaction with such target business, would be attractive. — DWAC S-1 Filing", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-3f41-721f-9e58-21a19d1a643d", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 15, "from": 12, "beatId": "077b76b9-5794-4341-aa90-26d11215b194", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Expose Contradiction", "beatSlug": null, "evidence": "The exposure of undisclosed conflicts and regulatory non-compliance", "position": 2, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }