Donald Trump’s proposed social media company came as news to some of its investors ― and at least one pulled out when he learned his money was now tied to the former president.
“Many investors are grappling with hard questions about how to incorporate their values into their work,” hedge fund manager Boaz Weinstein told The New York Times in a statement. “For us, this was not a close call.”
The newspaper said Weinstein’s Saba Capital had been a major investor in Digital World, a special purpose acquisition company, or SPAC, formed for the purpose of acquiring another company.
As is common in SPAC arrangements, investors put their cash in before the acquisition target was chosen. When Weinstein learned it would be with Trump’s firm, he bailed.
Trump announced the new company this week, saying it would launch a right-wing rival to Twitter called Truth Social. Shares in the company more than tripled on Thursday, the day after the deal was announced.
One unnamed investor who held 10% of the company told the Financial Times he sold everything as soon as he could.
“The idea that I would help [Trump] build out a fake news business called Truth makes me want to throw up,” he said.
It’s not clear if that investor was Weinstein.
Another large investor seemed much happier with the deal.
“When you partner with the right sponsor teams that have a clear vision on their targets, good things can happen quickly,” David Puritz of Shaolin Capital Management told the Financial Times.
Reuters noted the company was founded by Patrick Orlando, who has formed at least four other SPACs and has plans for two more, but so far none have led to a completed deal.