Donald Trump's social media company, Trump Media & Technology Group (TMTG), is set to go public following the approval of a merger with Digital World Acquisition Corporation (DWAC) by the latter's shareholders on Friday. The deal, which comes approximately two-and-a-half years after the special purpose acquisition company (SPAC) announced plans to merge with TMTG, could potentially net the former president a windfall of $3 billion or more.
The newly combined company, Trump Media, is expected to begin trading publicly next week under the stock symbol "DJT," which are Trump's initials and the same ticker symbol used by his now-defunct casino and hotel company. At current trading prices of DWAC, Trump's nearly 80 million shares in the merged company would be worth around $3 billion or more, although the exact opening share price of the merged company remains uncertain.
However, under the current terms of the deal, Trump will be barred from selling his shares in the merged company for at least six months. While it is possible that the board of directors could vote to allow Trump to sell shares earlier, the board is likely to be stocked with individuals close to the former president, including his son Donald Trump Jr., former wrestling company executive Linda McMahon, and Trump's former trade representative Robert Lighthizer.
If the board were to sign off on lifting the share lock-up period, it could quickly free up a significant source of cash for Trump, who currently faces substantial legal bills from his attorneys in various criminal and civil cases, as well as damage judgments exceeding half a billion dollars in three separate civil cases.
The merger approval comes as Trump faces the possibility of New York Attorney General Letitia James attempting to collect on a $454 million civil fraud judgment against him starting Monday. Trump's lawyers have stated in a court filing that he does not have sufficient cash to offer as collateral to bond companies for a bond that would secure the judgment and prevent James from collecting. However, in a recent Truth Social post, Trump claimed to have "almost five hundred million in cash."
Despite Truth Social's lackluster launch and limited sales of only about $5 million since 2021, Trump′s supporters have rallied behind the company, driving up shares in Digital World by approximately 145%, to $6 billion, with the company set to trade on the stock market as Trump Media & Technology Group under the "DJT" ticker.
Julian Klymochko, founder and CEO of a SPAC-focused fund at Accelerate Financial Technologies, attributed Digital World's price rise to factors other than the company's underlying fundamentals. "Truth Social hasn't really taken off," Klymochko noted. "At this point, it's a meme stock. It's really just a betting tool on the probability of Trump winning the election."
The merger has faced several legal hurdles since Digital World first announced plans to combine with Trump's digital media firm in 2021. As a SPAC, Digital World raised money from investors through an initial public offering before searching for a company to take public. While investors in both companies can take a stake in the merged entity, original investors in the SPAC have the option to withdraw their cash if they do not approve of the deal.
