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When former President Donald J. Trump’s fledgling social media company and its merger partner announced in December that they had secured $1 billion in additional private funds for the deal, it set off speculation about the identities of the investors.
Who were the roughly three dozen investors betting on the success of the former president’s new company? Were they big Wall Street names? Political supporters of Mr. Trump? Technology and media funds sold on the promise of a right-wing alternative to Twitter?
A draft document that was shared with The New York Times about the $1 billion investment — called a “private investment in public equity” or PIPE — sheds some light. In such a deal, an investor exchanges cash for shares that are later registered by the company for sale in the open market.
The investors are mostly a mix of small to midsize hedge funds based in the United States and Canada, according to the document. The draft was circulated among investors on Tuesday, and two people briefed on the matter said a final version was expected to be filed with regulators Thursday, although the timing could change.
The hedge funds Pentwater Capital and Sabby Management are two of the bigger investors in the private placement, as previously reported by The Times. Funds associated with Pentwater, a $10 billion hedge fund based in Naples, Fla., stand to get the largest number of shares through the deal, according to the draft document.
Other big investors include Anson Funds Management, Kershner Trading Americas, K2 & Associates, Yorkville Advisors and MMCAP. Although they are not household names, some are well known in the hedge fund world for making PIPE investments, which often have lucrative terms. Many of Wall Street’s biggest hedge funds passed on the opportunity because they were concerned about the optics of teaming up with Mr. Trump.
At least two of the investors on the list were not yet known.
One large investor is an entity called Truth SPC. The name appears to be a reference to Truth Social, the Twitter look-alike that is a flagship product of Mr. Trump’s company, Trump Media & Technology Group. But online searches, including of U.S. corporate records, did not reveal any entity by that name.
Another large investor whose beneficial ownership is unclear is called Red Rowan Investments. The company appears to have been incorporated in December in the Cayman Islands.
The $1 billion private placement is a critical financing element to the proposed deal between Trump Media and Digital World Acquisition, a “blank check” or special purpose acquisition company that went public in September. Digital World raised nearly $300 million through its initial public offering.
Investors in the private placement are not required to turn over any money until the Securities and Exchange Commission approves the merger. Once that happens, the investors collectively will get tens of millions of shares in the postmerger company, according to the draft document.
The S.E.C. is investigating whether some of the communications between Trump Media and Digital World before their deal was announced violated rules.
Patrick Orlando, the chief executive officer of Digital World, did not return requests for comment, nor did representatives for Trump Media.
Truth Social has gotten off to a rocky start. Mr. Trump only recently began to regularly post messages to his nearly three million followers. He had nearly 90 million followers on Twitter before the platform kicked him off last year.
Elon Musk, the billionaire entrepreneur who recently made an offer to buy Twitter, has said he will let Mr. Trump return to the platform if his deal closes. Mr. Trump said he intended to remain on Truth Social. But a new licensing deal Mr. Trump signed with Trump Media opens the door for him to also post political messages on Twitter if the social network lifts its ban.