“Truth Social, Trump’s Social Media Venture, Goes Public After DWAC Merger Greenlighted”

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In a significant development, Donald Trump’s social media company, Truth Social, is poised to go public after Digital World Acquisition Corporation (DWAC) shareholders approved a merger with Trump Media & Technology Group, the parent company of Truth Social. With Trump holding 58.1% of the stock and DWAC’s per-share value standing at $40, the former President could potentially earn nearly $3 billion from this deal.

The approval of the merger comes nearly two and a half years after it was initially proposed by the special purpose acquisition company. Truth Social is expected to debut on the stock market under the symbol DJT, representing Trump’s initials, as early as next week.

This merger is seen as a strategic move for Trump, especially as he faces legal challenges, including a civil fraud trial where Letitia James seeks to collect $454 million from him. The valuation of Truth Social is considerable, although it ranks below giants like TikTok and Facebook in terms of social media platforms.

However, the deal includes precautions to protect Trump’s stake in the company, as any decline in DWAC’s share prices could impact the value of his shares. A lockout provision prevents him from immediately selling his shares, potentially limiting his ability to use the merger proceeds for legal settlements.

Shortly after the merger approval, DWAC’s share price experienced a temporary decline of 12%, but it recovered later in the day. Data from FactSet indicates that 11% of DWAC’s tradable shares are being sold short, indicating a bet on a drop in share prices.

Trump’s financial situation is under scrutiny, with substantial legal bills from ongoing criminal and civil fraud cases adding to the pressure. This merger with DWAC represents a significant financial opportunity for Trump, albeit one with complexities and challenges given the legal and financial landscape he navigates.

Sources By Agencies