Former United States President Donald Trump’s new social media company, Truth Social, is backed by a Florida-based capitalist with ties to an investment vehicle in China, according to Securities and Exchange Commission filings.
Patrick Orlando, who heads the blank-check company taking Trump’s Truth Social public in US markets, is also the CEO of Yunhong International, a tax-haven Cayman Islands-registered company, with a business address in Wuhan, China.
Yunhong International aims to “capitalize on growing opportunities created by consumer/lifestyle businesses that have their primary operations in Asia”, it said in a recent SEC filing.
Orlando is the CEO of Digital World Acquisition Corp whose shares have skyrocketed since disclosing the firm plans to acquire Trump’s new social media company. Shares in Digital World extended their rally on Friday, surging above $100 in heavy trading, up from $10 a share before the announcement two days ago.
Hedge funds that invested in Digital World are set to make five times their investment, regulatory filings showed, while Orlando, who backed the deal, is likely to see a $420m windfall from the surge in shares, the Reuters news service reported.
Digital World was the most discussed stock on trading-focused social media site Stocktwits, a platform seen as a measure of interest from individual investors and meme stock players. Message volumes on Stocktwits related to the SPAC were up more than 9,000 percent, Reuters reported.
As US president, Trump bashed China for its trade practices and blamed the Chinese government for the coronavirus pandemic, which originated in Wuhan. Trump’s rhetoric at the end of his presidency was so threatening, that the top US military general, Mark Milley called his counterpart to calm Chinese fears.
SPACs are “special purpose acquisition companies” – hot but risky new Wall Street financing vehicles also known as blank-check companies – that raise funds on the public financial markets and then seek out existing businesses to acquire.
“No matter your politics this stock will rip … I’ll start my pick up at a meager 100 shares and then add to my position on dips,” a Reddit message board user wrote.
SPACs accounted for half of the newly listed public companies in the US in 2020 and, in the first quarter of 2021, there were 295 new SPACs formed raising a record $96bn, according to the Harvard Business Review.
Saying he was creating the site “to stand up to the tyranny of big tech”, Trump announced on October 20 that Truth Social, which has yet to launch, would be opened to invited guests in November and all users in early 2022.
Trump, who had built a huge social media following during his presidency, was banned by major US social platforms, Twitter, Facebook and others, after his repeated false claims the 2020 election was stolen and his supporters violently stormed the US Capitol on January 6.
“We live in a world where the Taliban has a huge presence on Twitter, yet your favorite American president has been silenced,” Trump said.
“I’m excited to soon begin sharing my thoughts on TRUTH Social and to fight back against Big Tech,” Trump said.
Trump’s new company is planning a video-on-demand service dubbed TMTG+ that will feature entertainment programming, news and podcasts.
Some tech users were able to create fake accounts on the site, which one person said appeared to be based on open-source code.
It appears the team behind Trump’s social media platform ‘TRUTH Social’ have been testing out several versions of the site, including one based on Pleroma.
— Mikael Thalen (@MikaelThalen) October 21, 2021
An earlier effort to launch a blog on Trump’s existing website was abandoned after the page drew a low number of followers.
Orlando is a 1995 graduate of the MIT Sloan School of Management who has been involved in finance, derivatives and commodities trading for more than 20 years, according to a profile statement on his company Benessere Investment Group’s website.