United States: The idea of Donald Trump again trading in the stock exchanges is barely a few days away.
On Friday, the fate of Digital World Acquisition Corporation, a run-of-the-mill shell company that is planning to tie up with the former President’s media business, is all but to be concluded. After the deal has been approved by the shareholders, Trump Media & Technology Group, which has as its flagship product social site networking Truth Social, is going to be in the position to begin trading on the Nasdaq Digital World’s stock market, as reported by The Associated Press.
Merger Details
The thumbs-up for the merger, which is more like it than not, will be profitable to Trump. He would own a large majority of the merger project – or become the biggest shareholder with 79 million shares. You may have a better understanding of the value of Trump’s holdings in the company, which is currently trading at more than 42 dollars per share. The value of his stake will be over three billion dollars.
The prospect of the deal arrives at a time when the presumptive Republican presidential nominee is facing his most costly legal battle to date: a $454 million compensation case in a fraud complaint.
However, on Friday, even if approved, for Trump, it probably won’t just be cashing out because of a ‘lock-up’ policy which does not allow company insiders to sell the newly issued shares for a period of six months.
Past Ventures
Trump’s experience in stock trading was unsuccessful before. The Casinos and resorts, owned by Trump Hotels and Casino Resorts did go public in 1995 under the symbol DJT. The same symbol is going to be used by Trump Media. However, by 2004, a year after the initial filing, his casino company had fallen into bankruptcy and was removing it from the list of the New York Stock Exchange.
The Digital World document highlighted the risks that the investors in Truth Social and Trump Media would face if the two companies were listed in the public.
One threat, according to them, is that Trump, as a dominant stockholder, would be entitled to cast a vote that is in his own interest—which may not always be in the interest of all the stockholders. Digital World published the rate of failure for new social media platforms and Trump Media, the latter of which is expected to operate at a loss “for the foreseeable future.”
Financial Performance
Donald Trump’s media company incurred losses of $49 million during the nine months of last year. It generated only $3.4 million in income and was required to spend $37.7 million in interest expenses.
Trump Media and Digital World first made their merger announcement in October 2021, then. Besides a federal investigation, the deal faced a series of lawsuits that ultimately ended on Friday, May 14.
Hours after his social media account with X, the major social media platforms, had been suspended, the former President announced the launch of his own social media platform, Truth Social, in February 2022. He, however, has remained on Truth Social as his loudspeaker, as reported by The Associated Press.
Truth Social Launch
In a Thursday night post on the social media platform, Trump endorsed Truth Social, writing, “TRUTH SOCIAL IS MY VOICE AND THE REAL VOICE OF AMERICA!!! MAGA2024!!!”
The number of active users in Truth Social remains confidential for Trump Media. However, the competing research firm, Similarweb, says that it had about 5 million active mobile and web users worldwide in February. Which is much lower than TikTok’s 2 billion subscribers and Facebook’s 3 billion subscribers but still above those of Parler, an app that has been offline nearly a year but is planning a comeback, or Gettr, which in February had less than 2 million visitors.