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A foundation on sand

Tuesday. A sunny and cool Day of Infamy.

The Times looks at how Russian ransomware gangs are able to operate in plain sight of authorities.

So this is interesting, not only for who’s involved but because of the process and the amount of money at play. Digital World Acquisition Corporation is a SPAC, which raised money by selling shares for $10 dollars. They raised almost $300 million in a blind investment. Then, surprisingly, they merged with a company called TMTG, which stands for Trump Media and Technology Group, bringing that $300 million along. (Regulators are looking at this deal.) TMTG didn’t (and doesn’t) appear to have any assets other than the name on the marquee. As Dan Primack notes, it “appears to be a shell company buying a shell company.” Matt Levine writes that “so far there is almost no sign that TMTG is actually building a social network or a streaming platform or anything else.” But they don’t have too. The market is pricing shares at about $45, a very good deal for the SPAC investors who paid $10. But it was not a great deal for TMTG, which was leaving money on the table. Here’s where it gets interesting. TMTG then went out to institutional investors with a PIPE to offer shares at $33 – and raised a billion dollars! The PIPE investors got a good deal, SPAC investors got an even better deal and TMTG got a billion and a half dollars. So what’s next for TMTG? Will they use that billion-plus bankroll to construct a real media and technology company or run this out as a huge pyramid scheme, with retail investors (read: Trump supporters) footing the bill? Well, here’s a clue: Rep. Devin Nunes, whose background is as a dairy farmer, has been chosen as the CEO.

MassLive and Universal Hub are reporting that the city will be distributing free home Covid tests. About time.

And Sweden wants its names back. They’re looking at you, IKEA.

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