Donald Trump is returning to the stock market. Shareholders of Digital World Acquisition Corp., a publicly traded shell company, approved a deal to merge with the former president’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.
Quick Read
- Trump’s Media Business Goes Public: Donald Trump’s media company, Trump Media & Technology Group, is set to trade on the Nasdaq following a merger deal with Digital World Acquisition Corp. approved by shareholders.
- Potential Billion-Dollar Stake: Trump could gain a stake worth over $3 billion, owning nearly 79 million shares of the combined company, based on Digital World’s closing stock price.
- Legal and Financial Hurdles: Amid a $454 million judgment in a fraud lawsuit, Trump faces restrictions on immediately cashing out due to a six-month “lock-up” provision preventing insiders from selling shares.
- Previous Stock Market Challenges: Trump’s prior public venture, Trump Hotels and Casino Resorts, faced bankruptcy and was delisted from the NYSE, reflecting the challenges of navigating the stock market.
- Investment Risks Highlighted: Filings reveal risks to investors, including Trump’s potential voting conflicts of interest and the high failure rate of new social media platforms.
- Financial Struggles for Trump Media: The company reported significant losses in the past year, raising concerns about its long-term profitability.
- Truth Social’s Place in Social Media: Despite not disclosing user numbers, research estimates Truth Social’s active users are significantly lower than major platforms like TikTok and Facebook but higher than some conservative-leaning rivals.
- Trump’s Continued Promotion of Truth Social: Despite being reinstated on major platforms, Trump emphasizes Truth Social as his primary communication channel, declaring it the “real voice of America.”
The Associated Press has the story:
Trump’s TRUTH Co. will go public after merger with shell company is approved
Newslooks- NEW YORK (AP) —
Donald Trump is returning to the stock market. Shareholders of Digital World Acquisition Corp., a publicly traded shell company, approved a deal to merge with the former president’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 could receive a sizeable payout in the process. He would own most of the combined company — or nearly 79 million shares. Multiply that by Digital World’s closing stock price Thursday of $42.81, and the total value of Trump’s stake could surpass $3 billion. The shares did fall 5% after the merger approval was announced.
The deal’s 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.
But Trump won’t be able to cash out the Friday deal’s windfall immediately, unless some things change, due 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.
Trump’s earlier foray into the stock market didn’t end well. Trump Hotels and Casino Resorts went public in 1995 under the symbol DJT — the same symbol Trump Media will trade under. By 2004, Trump’s casino company had filed for bankruptcy protection and was delisted from the New York Stock Exchange.
Ahead of the merger’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.”
Trump Media lost $49 million in the first nine months of last year, when it brought in just $3.4 million in revenue and had to pay $37.7 million in interest expenses.
Trump Media and Digital World first announced their merger plans in October 2021. In addition to a federal probe, the deal has faced a series of lawsuits leading up to Friday’s vote.
Truth Social launched in February 2022, one year after Trump was banned from major social platforms including Facebook and Twitter, the platform now known as X, following the Jan. 6 insurrection at the U.S. Capitol. He’s since been reinstated to both but has stuck with Truth Social as a megaphone for his message.
Trump promoted Truth Social in a post on the social media network Thursday evening, saying: “TRUTH SOCIAL IS MY VOICE, AND THE REAL VOICE OF AMERICA!!! MAGA2024!!!”
Trump Media hasn’t so far disclose Truth Social’s user numbers. But research firm Similarweb estimates that it had roughly 5 million active mobile and web users in February. That’s far below TikTok’s more than 2 billion and Facebook’s 3 billion — but still higher than rivals like Parler, which has been offline for nearly a year but is planning a comeback, or Gettr, which had less than 2 million visitors in February.
