U.S. President Joe Biden is looking to close his two-day virtual Summit for Democracy on Friday by shining a spotlight on the importance of election integrity, countering authoritarian regimes and bolstering independent media.
On the summit’s first day, Biden announced plans for the U.S. to spend up to US$424 million around the world to support independent media, anti-corruption work and more. The initiative came as he called on world leaders to work with him to reverse what he called an alarming diminishment of democracy around the globe.
“Will we allow the backward slide of rights and democracy to continue unchecked?” Biden said Thursday. “Or will we together — together — have a vision … and courage to once more lead the march of human progress and human freedom forward?”
The president is scheduled to deliver closing remarks to leaders and civil society groups on Friday afternoon.
Biden didn’t mention either China or Russia by name as he opened the summit. But he has repeatedly made a case that the U.S. and like-minded allies need to show the world that democracies are a far better vehicle for societies than autocracies. It is a central tenet of Biden’s foreign policy outlook — one that he vowed would be more outward looking than his predecessor Trump’s “America First” approach.
Biden underscored that even long-established democracies, like the United States, haven’t been immune to the strains.
“Here in the United States we know as well as anyone that renewing our democracy and strengthening our democratic institutions requires constant effort,” Biden said.
Thursday’s video gathering drew backlash from the United States’ chief adversaries and other nations that were not invited.
The ambassadors to the U.S. from China and Russia, two countries that did not receive invitations, wrote a joint essay describing the Biden administration as exhibiting a “Cold-War mentality” that will “stoke up ideological confrontation and a rift in the world.” The administration also faced scrutiny over how it went about deciding which countries to invite.
Other leaders at the summit delivered their own remarks on the state of democracy — many prerecorded — often reflecting on the stress that rapidly evolving technology is having on their nations. They also bemoaned the increase of disinformation campaigns aimed at undermining institutions and elections.
“The democratic conversation is changing,” said Denmark’s Prime Minister Mette Frederiksen. “New technologies and large tech companies are increasingly setting the stage for the democratic dialogue, sometimes with more emphasis on reach than on freedom of speech.”
The summit comes as Biden is pressing Russia’s Vladimir Putin to step back after a massive buildup of troops on the Ukraine border that has created growing concern in Washington and European capitals as well as Ukraine itself. Biden on Wednesday said that he warned Putin of “severe consequences” if Russia invaded.
Ukraine’s President Volodymyr Zelenskyy, who took part in Thursday’s summit and later spoke by phone with Biden, said on Twitter, “Democracy is not a given, it must be fought for.”
Poland’s Andrzej Duda spoke out against Russia in his address, decrying Moscow and its support of Belarus.
Poland and Western allies have accused Russian ally Belarus of using migrants as pawns to destabilize the European Union in retaliation for its sanctions on his authoritarian regime. Hundreds of migrants, mostly from the Middle East, have flocked to the Belarus-Poland border.
Poland “took on a commitment to be a support for democracy in Eastern Europe,” Duda said. “It is a beautiful task, but it has its consequences. It has made us the target of the Kremlin propaganda.”
Putin made no public comment on the summit Thursday as he took part in his own video call with members of the Kremlin council for human rights.
Biden has said passage of his ambitious domestic agenda at home — the $1 trillion bipartisan infrastructure bill he signed into law, as well as the roughly $2 trillion “Build Back Better Act” of social and climate change initiatives moving through the Senate — will demonstrate how democracy can improve people’s lives.
Some advocates also want Biden to focus more on shoring up democracy at home. One early test came Thursday as the House approved the Protecting Our Democracy Act, the third in a trio of bills — alongside the Freedom to Vote Act and the John Lewis Voting Rights Act — largely backed by Democrats. All three are expected to be stalled by Republicans in the Senate.
“Here in the United States, we know that our democracy is not immune from threats,” Vice President Kamala Harris said in remarks to close out the first day of the summit that referenced the insurrection at the Capitol in January. “Jan. 6 looms large in our collective conscience, and the anti-voter laws that many states have passed are part of an intentional effort to exclude Americans from participating in our democracy.”
The International Institute for Democracy and Electoral Assistance said in its annual report that the number of countries experiencing democratic backsliding “has never been as high” as the past decade, with the U.S. added to the list along with India and Brazil.
Chinese officials have offered a stream of public criticism about the summit. They have also expressed outrage over the administration inviting Taiwan to take part. China claims the self-governing island as part of its territory and objects to it having contacts on its own with foreign governments.
Pakistan’s Prime Minister Imran Khan declined to attend the conference. In a statement issued ahead of the meeting, the foreign ministry said, “We value our partnership with the U.S., which we wish to expand both bilaterally as well as in terms of regional and international cooperation.”
Yet Pakistan’s relationship with the U.S. has been fraught with suspicion on both sides. Islamabad has balked at Washington’s often-stated criticism that Pakistan has not been a reliable partner in the war on terror, accusing it of harboring the Taliban even as that group fought a U.S.-led coalition. Pakistan says it has lost 70,000 people to the war on terror since 2001 and is ready to be a partner in peace but not in war.
Other uninvited countries have also shown their displeasure. Hungary, the only European Union member not invited, tried unsuccessfully to block the EU Commission’s president from speaking on behalf of the bloc at the summit. Last year, Biden referred to Hungarian Prime Minister Viktor Orban as a “thug.”
Hungarian Foreign Minister Peter Szijjarto dismissed the summit as a “domestic political-type of event,” where countries whose leaders had a good relationship with Trump were not invited.
Associated Press writers Lisa Mascaro in Washington, Justin Spike in Budapest, Munir Ahmed in Islamabad, Vladimir Isachenkov in Moscow and video producer Liu Zheng in Beijing contributed to this report.
Social Media Buzz: NYPD Death, Roe v. Wade , M&Ms Get Makeover – BNN
(Bloomberg) — Here’s what’s buzzing on social media this morning:
Two New York City Police Department officers were shot in Harlem on Friday, one fatally. Officer Jason Rivera, 22, was killed after 10 to 15 shots were fired when he and other officers responded to a 911 call from a woman who said she was in a dispute with her son. The second officer is in critical condition.
Mayor Eric Adams called it an attack on the city of New York.
Saturday marks the anniversary of the Supreme Court’s 1973 ruling of Roe v. Wade, which legalized abortion nationally. Soon, a conservative-majority Supreme Court will rule on whether a Mississippi ban on most abortions after 15 weeks of pregnancy is constitutional.
Pro-choice advocates worry that this could be the last anniversary of the Roe v. Wade decision. Anti-abortion supporters called on the Supreme Court to overturn the court decision on Friday at the 49th annual March for Life rally.
Mars Inc. updated M&M mascots with the goal “to reflect the more dynamic, progressive world that we live in,” according to a company press release. The green M&M has lost its “sexy” boots and will sport sneakers. Likewise, the brown M&M will wear lower block heals, ditching high stilettos and the orange M&M “will acknowledge his anxiety.”
Ian Alexander Jr., only child of actress Regina King has died at the age of 26 from a suicide, People reported. “Our family is devastated at the deepest level by the loss of Ian,” King said in a statement to People. “He is such a bright light who cared so deeply about the happiness of others.” Alexander Jr., who was a DJ, turned 26 on Wednesday.
©2022 Bloomberg L.P.
Scooped: it was the ‘mainstream media’ that brought Boris Johnson low – The Guardian
Buyer Be Careful In The SPAC/Trump Media Deal – Forbes
Like many special purpose acquisition company (SPAC) deals, the proposed merger of Digital World Acquisition Corp. (DWAC) and the Trump Media and Technology Group is complex, which poses a risk to investors who do not understand SPACs. But this complexity is compounded by the fact that DWAC shares are trading as a meme stock with their own reddit forum, r/DWAC. It is possible, however, to dig into the details of the deal and make some conjectures about the future of the DWAC/Trump Media merger and what that might mean for its stock price movements.
In September 2021, DWAC conducted its IPO by selling 30 million units (shares plus warrants) to 11 institutional investors, as well as the founder, at $10 per unit, raising around $300 million. The SPAC is currently trading over $70 per share, so the SPAC is worth more than $2 billion today. For the original IPO investors, the SPAC has been a great deal thus far, earning them at least a 500% return. However, whether it will be a great deal for the investors who bought in after the IPO is questionable.
In October 2021, DWAC announced its merger deal with Trump Media, valuing Trump Media at a minimum of $875 million for a company that is still not operational. Depending on the merged entity’s stock price during the three-year period following the merger close, Trump Media shareholders will receive up to 127.5 million shares in the merged entity plus $1.2 billion in working capital. At the current share price, the market is valuing the merged entity at over $10 billion.
In December 2021, DWAC raised an additional $1 billion via a private offering known as a private investment in public entity (PIPE). These PIPE investors have forward agreements to invest $1 billion in convertible preferred shares in the listed Trump Media as part of the merger closing. The number of common shares they can convert to is based on the value-weighted average price (VWAP) over the 10 days after the closing, known as the VWAP period. The lower the VWAP, the more shares allocated.
In its SEC filing for the PIPE offering, DWAC disclosed that it was under investigation by the U.S. Securities and Exchange Commission (SEC). It is illegal for a SPAC to have substantive merger discussions with possible targets prior to their listing and then it is fraud to state otherwise. It has been reported that DWAC and Trump Media discussed the deal prior to their IPO and allegedly lied about it in multiple SEC filings. The SEC investigation into this deal reportedly continues, the latest in a series of reported probes into the Shanghai-based Arc Capital, which was the sole advisor in the creation of DWAC.
Possible DWAC/Trump Media Price Movements
To form conjectures about future price movements, we need to distinguish among three groups of investors: the current investors, the PIPE investors, and the shareholders of Trump Media. The current investors with long positions would like the price to increase as much as possible. Speculators who have short positions, of course, want the price to fall. PIPE shareholders want it to fall during the VWAP period so they will be allocated more shares, and Trump Media shareholders want the price to rise after the merger so they can also be allocated more shares.
Starting with the motivations of the PIPE investors, it is clear that they want the price during this VWAP period to decline to at least to $16.67 to get their maximum share allocation of 100 million shares. The PIPE investors can potentially dump 30 million or more shares on the market during the VWAP period to achieve their goal. Furthermore, the PIPE investors can also short at any price above $33.60 during the VWAP period. Therefore, it seems logical to expect the price to be pushed down during the VWAP period, as close as possible to $16.67.
Clearly, current buyers, including the meme players, expect the merger will get SEC approval and that the listed Trump Media will do well; they also may not understand the motivations of the PIPE investors. Meanwhile, for the current sellers there are two expectations: no SEC approval and an understanding of the PIPE investors. Thus, the current buyers and sellers are playing against each other, generating the current stock price.
To illustrate, let’s assume that there is a 50% chance for SEC approval and a share price of $70.00. Some of those who are short selling expect SEC rejection, and therefore have a price expectation of $10.20, the approximate price at which DWAC shares can be redeemed. Those who expect the deal to go through have an implied price target of around $130 because 50% (130.00) plus 50% ($10.20) gives us the share price of $70.00.
There are two factors that are affecting this expected price. First, the meme buyers are irrationally acting as if the probability of SEC rejection is small if not zero, which seems implausible given the evidence. Second, given the limited number of shares to short, there is excess demand from short sellers. According to Bloomberg, DWAC had the highest short borrowing costs of any stock in the fourth quarter, at 86%. These costs put a cap on how much the short sellers can push the price down. All these factors are causing DWAC’s current elevated share price, now above $70.
Of course, the price of DWAC will jump if the SEC approves the deal, which would be a good time to sell or short and not the greatest time to buy given the expected actions of the PIPE investors. Informed traders know the motivations of the PIPE investors; therefore, given SEC approval, as the merger closure approaches, we can expect some of these traders to sell their shares if they have not already, and others will short sell, pushing DWAC’s price down. If desired, they could buy back during the VWAP period. In addition, immediately after the merger, during the VWAP period, we can expect an increase in share sales and short selling by the PIPE investors.
Post-VWAP period we can expect the shorts to be covered and the stock price to be driven by meme investors, putting upward pressure on the price. However, post-merger, the number of shares available to trade will likely rise from my estimated 15 million shares today to include an additional 45 million shares from the PIPE investors and current institutional investors. Moreover, Trump Media shareholders and the founder will also be able to start selling their shares immediately after the closing if the merged entity’s stock price is above $12 for a sustained period, which would add a minimum of another 95 million shares to the market. What remains to be seen is whether there will be enough post-merger demand to soak up all these potential shares.
Which Way from Here
Investors must take into account two critical issues: the possibility that the SEC rejects the deal and the motivation of the PIPE investors, both of which would likely put downward pressure on DWAC’s share price. Currently, short sellers are assuming that one or the other of these outcomes will cause the price to fall. The meme players appear to ignore these two possibilities, and hence their continued upward hopes for the stock price. Post-VWAP period, Trump shareholders and buyers of the stock will want to price to climb; but there could be almost ten times the number of shares trading at that time.
Unless investors currently own or are shorting DWAC stock, now is a risky time to buy and an expensive time to short. For those who currently own the stock, it may be wise to sell before the merger, and shares could be bought again post-VWAP period. If you are currently short, hold on to your short as long as possible given the cost of shorting. Whatever the strategy, it’s wise with any SPAC merger deal—and especially this one—for investors to know what they’re doing and why.
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