Donald Trump’s social media company, Truth Social, has been approved to go public. He is set to make a substantial profit as he returns to the stock market with his media business. Shareholders of Digital World Acquisition Corp. have approved a merger with Trump Media & Technology Group, paving the way for the company to begin trading on the Nasdaq.
The business, which includes social networking site Truth Social, is expected to have a valuation of over $5 billion, without facing financial challenges. This move marks Trump's entry into the world of publicly traded companies, following the approval of the merger by DWAC shareholders.
Digital World’s stock price of $36.94 on Friday, Donald Trump’s stake could be worth close to $3 billion as reported by AP.
This news comes during a challenging legal situation for the likely Republican presidential candidate as he faces a $454 million judgment in a fraud case.
Shareholders of Digital World Acquisition Corp. (DWAC), a publicly traded shell company, voted in favor of a merger with Trump Media & Technology Group, the parent company of Truth Social. This merger will allow Truth Social to begin trading on the Nasdaq stock market.
As a result of this approval, Donald Trump stands to earn a substantial windfall. Here are the key details:
Trump owns nearly 80 million shares in the merged company.
The current trading prices of DWAC suggest that his shares could be worth around $3 billion or more.
The merged company’s stock will likely be traded under the symbol DJT, which also happened to be the ticker symbol for Trump’s long-gone casino and hotel company.
However, Trump won't be able to profit from the deal right away unless the company's board decides to make changes to a rule that prohibits insiders from selling their shares for six months.
About Digital World Acquisition Corp. (DWAC)
Digital World Acquisition Corp. (DWAC) is owned by a combination of institutional shareholders, insiders, and retail investors. Here’s the breakdown:
Institutional Shareholders: Approximately 4.29% of DWAC is owned by institutional investors.
Insiders: Insiders within Digital World Acquisition hold around 8.31% of the company’s shares.
Retail Investors: The majority ownership, 87.39%, lies with retail investors.
Many of the investors in Digital World are small-time investors who are either supporters of Trump or trying to make a profit from the hype, rather than large institutional and professional investors. These shareholders have helped the stock price more than double this year in anticipation of the merger. However, on Friday, the shares dropped almost 14%.
In preparation for the merger approval on Friday, Digital World disclosed many risks that investors may face, including those related to the Truth Social owner once Trump Media goes public.
One risk mentioned was that Trump, as a controlling stockholder, could vote in his own interest rather than in the best interests of all shareholders. Digital World also highlighted the high failure rate of new social media platforms and Trump Media's expectation of ongoing financial losses.
