HomeForeignTrump May Net $3bn As His TRUTH Social Media Firm Gets Nod...

Trump May Net $3bn As His TRUTH Social Media Firm Gets Nod To Go Public

Donald Trump is returning to the stock market, and the former president stands to reap a sizeable payout in the process.

Shareholders of Digital World Acquisition Corp., a publicly traded shell company, approved a deal to merge with the Trump’s media business in a Friday vote. That means Trump Media & Technology Group, whose flagship product is social networking site Truth Social, will soon begin trading on the Nasdaq stock market.

Trump is set to own most of the combined company — or nearly 79 million shares.

Multiply that by Digital World’s closing stock price Friday of $36.94, and the total value of his stake could be nearly $3 billion.

The greenlight arrives at a time the presumptive Republican presidential nominee is facing his most costly legal battle to date: a $454 million judgment in a fraud lawsuit.

FILE – Republican presidential candidate former President Donald Trump speaks at a campaign rally, March 9, 2024, in Rome Ga. An attorney for Donald Trump says he’s optimistic an appellate review will lead to the Georgia 2020 election interference case against him being dismissed and Fulton County District Attorney Fani Willis being disqualified. (AP Photo/Mike Stewart, File)

Trump’s latest 2024 campaign fundraising report shows him lagging behind Biden in cash

But Trump won’t be able to cash out the deal’s windfall immediately, unless the company’s board makes changes to a “lock-up” provision that prevents company insiders from selling newly issued shares for six months.

Trump’s presidential campaign did not immediately respond to request for comment.

When a publicly traded shell company agrees to buy a private company, the target company takes its place on a stock exchange once the combination is approved by shareholders. If recent activity in Digital World’s stock is any indication, shareholders of Trump Media could be in for a bumpy ride.

Many of Digital World’s investors are small-time investors who are either fans of Trump or trying to cash in on the mania, instead of big institutional and professional investors. Those shareholders helped the stock more than double this year in anticipation of the merger going through. But on Friday, the shares lost almost 14%.

 

Ahead of Friday’s approval, Digital World’s regulatory filings listed many of the risks its investors face, as well as those of the Truth Social owner once Trump Media also goes public.

One risk, the company said, is that Trump would be entitled to vote in his own interest as a controlling stockholder — which may not always be in the interests of all shareholders. Digital World also cited the high rate of failure for new social media platforms, as well as Trump Media’s expectation that it would lose money on its operations “for the foreseeable future.”

Associated Press

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