Donald Trump is making a comeback to the stock market. The merger between Digital World Acquisition Corp., a special purpose acquisition company, and Trump’s media venture was greenlit by shareholders on Friday. This move paves the way for Trump Media & Technology Group, the parent company of the social media platform Truth Social, to start trading on the Nasdaq.
Trump stands to gain significantly from this deal, holding nearly 79 million shares of the merged entity. Given Digital World’s last closing stock price of $42.81, Trump’s shares could be worth over $3 billion. However, following the announcement of the merger’s approval, the shares saw a 6% drop.
This financial boon comes amidst Trump’s ongoing legal challenges, including a $454 million judgment in a fraud lawsuit. However, due to a “lock-up” agreement, Trump may not be able to immediately liquidate his windfall from the deal.
Trump’s previous ventures into the stock market have been less than successful. His company, Trump Hotels and Casino Resorts, went public in 1995 and was delisted from the New York Stock Exchange in 2004 after filing for bankruptcy protection.
The merger’s approval has not been without its risks, as outlined in Digital World’s regulatory filings. These include concerns about Trump’s potential to prioritize his interests over those of other shareholders and the high failure rate of new social media platforms. Trump Media reported a $49 million loss in the first nine months of the previous year, with revenue of just $3.4 million against $37.7 million in interest expenses.
Despite facing a federal investigation and multiple lawsuits, Trump Media and Digital World announced their merger plans in October 2021. Truth Social was launched in February 2022, a year after Trump was banned from major social media platforms following the January 6 insurrection. Despite being reinstated on Facebook and Twitter (now X), Trump has chosen to use Truth Social as his primary communication channel.
In a recent post on Truth Social, Trump declared, “TRUTH SOCIAL IS MY VOICE, AND THE REAL VOICE OF AMERICA!!! MAGA2024!!!”
While Trump Media has not disclosed the user numbers for Truth Social, estimates by research firm Similarweb suggest it had around 5 million active users in February. This figure is significantly lower than the billions of users on platforms like TikTok and Facebook but surpasses other conservative social media platforms such as Parler and Gettr.