Tony Isaac shares a report from CNN: President Donald Trump’s social media and crypto company is making a huge bet on a far different industry — nuclear fusion, a potentially lucrative albeit commercially unproven energy technology that could help power a suddenly electricity-starved economy. Trump Media and Technology Group Thursday announced a surprise merger with TAE Technologies, in an all-stock deal valued at more than $6 billion that would create one of the first publicly traded fusion companies. News of the deal shares of Trump Media (DJT) 35% higher in early trading Thursday.
After the deal closes, shareholders of Trump Media and TAE would own about 50% of the combined entity. The combined companies plan to begin construction as soon as next year of the world’s first fusion reaction that could produce electricity on utility scale, rather than just in laboratory settings. The combination with TMTG could give TAE political clout. But it could also make it more politically controversial, particularly if it looks to receive any kind of federal government support, such as grants, low-interest loans or permitting approvals.
It could also give TAE access to capital that it needs. Under terms of the deal, TMTG would provide $300 million in cash for TAE’s plans. But that is likely a fraction of the cash available from some of TAE’s current investors, such as Google parent company Alphabet, as well as its bevy of private equity investors. But that $300 million is only a fraction of the money that TAE needs, or expects to be able to access, once it has become a public company with this deal. Staying a private company, even with deep pocketed investors, is no longer sufficient TAE CEO Michl Binderbauer told CNN Thursday. “It’s a multi-billion dollar undertaking,” said Binderbauer. “The velocity you can get the capital is differentiating. If I raise $2 billion over five years I can’t built the plant sufficiently fast.” He said the company has raised about $1.3 billion over the course of its 25-year history.