'Cybersecurity incident' shuts down London Drugs stores across Western Canada
All 79 locations of pharmacy and retail chain London Drugs were shut down Sunday after it was the victim of a “cybersecurity incident.”
Former U.S. President Donald Trump came a step closer on Friday to reaping a major windfall from his social media firm after investors in a blank-check acquisition company approved a tie-up currently worth about US$5.7 billion.
The deal values Trump's majority stake in the company that holds his app Truth Social at about US$3.3 billion. The windfall could prove vital as Trump grapples with the financial fallout of a string of legal cases against him, including a US$454 million judgment in a civil fraud case in New York.
Shareholders of Digital World Acquisition Corp (DWAC), the SPAC that plans to list Trump Media & Technology Group (TMTG) on the stock market through a merger, voted in favour of the deal on Friday.
While the next step would be for the deal to be completed next week, its future is fraught with uncertainty. Digital World's former CEO Patrick Orlando and former Trump business associates Andy Litinsky and Wes Moss have separately sued to block the merger, arguing they are entitled to more shares for their previous work on the deal.
It's unclear how and when these cases will be resolved. Even if the deal gets completed next week, Trump will not be allowed to sell any of his shares in the combined company for six months or borrow against them, based on terms he previously agreed.
The deal is also poised to deliver a vital US$300 million cash infusion to Truth Social parent Trump Media & T TMTG. The social media company lost US$10.6 million from its operations in the first nine months of 2023 after losing US$23.2 million in 2022, and has been funding itself by borrowing US$40.7 million through convertible promissory notes that can be paid back in stock.
Based on how Digital World's shares are currently trading, TMTG would be valued at as much as $5.7 billion following its merger with Digital World on an undiluted basis and as much as US$8.6 billion on fully diluted basis that takes into account warrants to be exercised and earnout shares to be issued.
In a rally fueled by Trump supporters and other retail investors, Digital World's stock has nearly quadrupled since its tie-up with TMTG was announced in 2021.
Buying the stock "will help President Trump get his bond, buying (four) shares by all will benefit all," Truth Social user @racinrob wrote in a post this week.
Digital World's shares tumbled over 10 per cent on Friday following the deal's shareholder approval.
An US$8.6 billion fully diluted valuation for the combined company billion would be a little less than half that of Elon Musk's much more popular social media company X.
In February, Digital World said Truth Social has so far had 8.9 million sign-ups. X, by comparison, has more than half a billion monthly users, according to Musk.
Trump has 6.7 million followers on Truth Social, compared to the more than 88 million followers he had on X when the platform permanently suspended him, and the 87.4 million followers he currently has on that platform.
Trump, who is running to be U.S. President again, will own between 58.1 per cent and 69.4 per cent of the combined company, depending on the extent to which investors back the deal.
TMTG was launched with the help of Litinsky and Moss - two former contestants on “The Apprentice” TV show - as a way for Trump to connect with his supporters after Facebook, Twitter and YouTube removed him following the Jan. 6, 2021 attack on the U.S. Capitol.
Digital World announced its merger agreement with TMTG in October 2021. Since then the deal has faced a series of setbacks and delays. Digital World has been a target of investigations by the U.S. Department of Justice and the Securities and Exchange Commission (SEC), ousted Orlando as its chief executive, and shook up its board.
In July, Digital World reached an US$18-million settlement with the SEC, which said Digital World misled investors by failing to disclose in filings that it had formulated a plan to acquire TMTG and was pursuing the acquisition before Digital World’s initial public offering.
In August, Trump posted on X his mug shot from his booking at Fulton County Jail in Georgia. He has not posted on X since, using Truth Social as his primary platform to reach voters.
Reporting by Helen Coster in New York and Svea Herbst-Bayliss in Rhode Island Editing by Greg Roumeliotis and Nick Zieminski
All 79 locations of pharmacy and retail chain London Drugs were shut down Sunday after it was the victim of a “cybersecurity incident.”
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