Former President Donald Trump's potential return to the stock market is generating significant interest as shareholders of Digital World Acquisition Corp. are set to vote on a merger with Trump Media & Technology Group, the company behind the social networking site Truth Social. If approved, this move would pave the way for Trump Media to trade on the Nasdaq stock market, with Trump poised to own a substantial portion of the combined company.
With Trump holding nearly 79 million shares, valued at over $3 billion based on Digital World's current stock price, the merger could result in a substantial payout for the former president. However, a 'lock-up' provision would prevent Trump from immediately cashing out his stake, requiring insiders to hold onto their shares for six months post-merger.
This development comes amidst Trump's ongoing legal battles, including a recent $454 million judgment in a fraud lawsuit. Trump's previous stock market venture with Trump Hotels and Casino Resorts, which went public in 1995, ended in bankruptcy by 2004.
While the merger is likely to be approved, Digital World has highlighted various risks associated with the deal, including Trump's controlling stake potentially conflicting with other shareholders' interests. Additionally, Trump Media's financial performance raises concerns, with the company reporting a $49 million loss in the first nine months of last year.
Despite facing regulatory scrutiny and legal challenges, Trump Media and Digital World announced their merger plans in October 2021. Truth Social, launched in February 2022 as an alternative to mainstream social platforms, has garnered an estimated 5 million active users, positioning it below major players like TikTok and Facebook but ahead of competitors like Parler and Gettr.
Trump's endorsement of Truth Social as 'the real voice of America' underscores his commitment to the platform following his ban from major social networks in the aftermath of the January 6 Capitol insurrection. As the merger decision looms, all eyes are on the outcome and the potential implications for Trump's media venture in the stock market.
