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 main product is the social networking site Truth Social, will soon start trading on the Nasdaq stock market.
Trump might receive a large payout in the process. He would possess most of the combined company — or nearly 79 million shares. If you multiply that by Digital World’s closing stock price Thursday of $42.81, the total value of Trump’s stake could exceed $3 billion. The shares fell five per cent after the merger approval was announced.
The deal’s approval happens when the presumed Republican presidential nominee is dealing with his most expensive legal battle: a $454 million judgment in a fraud lawsuit.
However, Trump won’t be able to immediately cash out the windfall from the Friday deal, unless some things change, due to a “lock-up” provision that prevents company insiders from selling newly issued shares for six months.
The Trump presidential campaign did not immediately respond to request for comment.
Trump’s previous involvement in the stock market did not 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.
Prior to 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 experienced a $49 million loss in the first nine months of last year, when it generated only $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. Besides a federal probe, the deal has faced a series of lawsuits leading up to Friday’s vote.
Truth Social started in February 2022, one year after major social platforms, including Facebook and Twitter (now known as X), banned Trump 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 platform for his message.
Trump promoted Truth Social in a post on the social media network Thursday evening, asserting: “TRUTH SOCIAL IS MY VOICE, AND THE REAL VOICE OF AMERICA!!! MAGA2024!!!”
Trump Media has not yet revealed Truth Social’s user numbers. However, research firm Similarweb estimates that it had approximately 5 million active mobile and web users in February. This is much less than TikTok’s over 2 billion and Facebook’s 3 billion, but still more than competitors like Parler, which has been offline for nearly a year but is planning a comeback, or Gettr, which had fewer than 2 million visitors in February.
