Trump’s Net Worth Soars as Truth Social Joins Stock Market
In a groundbreaking move, shareholders of Digital World Acquisition Corp., a publicly traded shell company, have approved a deal to merge with Trump Media & Technology Group, the former president’s media business, paving the way for its flagship product, Truth Social, to begin trading on the Nasdaq stock market. This development has the potential to significantly increase Trump’s net worth, as he would own the majority of the combined company, equivalent to nearly 79 million shares. With Digital World’s closing stock price on Thursday at $42.81, Trump’s stake could potentially exceed $3 billion in value. However, it should be noted that the shares did experience a 5% drop following the announcement of the merger approval.
This deal comes at a critical time for Trump, as he faces a $454 million judgment in a fraud lawsuit, marking his most costly legal battle to date. Despite the substantial windfall from the merger, Trump will not be able to cash out immediately due to a “lock-up” provision that restricts insiders from selling newly issued shares for six months.
It is interesting to recall Trump’s prior venture into the stock market with Trump Hotels and Casino Resorts. The company went public in 1995, trading under the symbol DJT, which is the same symbol Trump Media will adopt. However, by 2004, Trump’s casino company had filed for bankruptcy protection and was delisted from the New York Stock Exchange.
Digital World’s regulatory filings prior to the merger approval highlighted several risks that investors may face, including concerns over Trump’s ability to vote in his own interest as a controlling stockholder, which may not always align with the interests of all shareholders. Additionally, the filings mentioned the high failure rate of new social media platforms and Trump Media’s expectation of incurring losses on its operations for the foreseeable future.
Trump Media reported a loss of $49 million in the first nine months of the previous year, generating only $3.4 million in revenue and facing $37.7 million in interest expenses. These figures reveal the financial challenges that lie ahead for the company.
The merger between Trump Media and Digital World was first announced in October 2021 and has encountered various lawsuits and a federal probe leading up to the recent shareholder vote. The launch of Truth Social in February 2022 marked Trump’s return to social media after being banned from major platforms like Facebook and Twitter in the wake of the January 6 insurrection at the U.S. Capitol.
While Truth Social’s user numbers remain undisclosed by Trump Media, research firm Similarweb estimates that the platform had approximately 5 million active mobile and web users in February. Though this figure is significantly lower than the user bases of TikTok (over 2 billion) and Facebook (3 billion), it still surpasses that of competitors like Parler and Gettr, which had less than 2 million and 2 million visitors, respectively, in February.
In conclusion, the approval of the merger between Digital World Acquisition Corp. and Trump Media & Technology Group signifies a significant milestone for both entities. As Truth Social commences trading on the Nasdaq stock market, Trump’s net worth could experience a substantial boost. However, potential risks and the challenging landscape of the social media industry should not be overlooked. It remains to be seen how Trump Media will navigate these hurdles and secure its position in the market.
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