Trump’s social media company approved to go public, potentially netting former president billions

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But Trump won’t be able to cash out the deal’s windfall immediately, unless the company’s board makes changes to a “lock-up” provision.

FILE – Republican presidential candidate former President Donald Trump speaks after voting in Florida’s primary election in Palm Beach, Fla., Tuesday, March 19, 2024. Trump’s return to the stock market could be right around the corner. All eyes are on a vote Friday by shareholders of Digital World Acquisition Corp., a shell company that is looking to merge with the former president’s media business.

Trump is set to own most of the combined company — or nearly 79 million shares. Multiply that by Digital World’s closing stock price Thursday of $42.81, and the total value of his stake could surpass $3 billion. Many of Digital World’s investors are small-time investors who are either fans of Trump or trying to cash in on the mania, instead of big institutional and professional investors. Those shareholders helped the stock more than double this year in anticipation of the merger going through. After the deal was cleared Friday, shares fell as much as 12% before bouncing back to be down about 2.

One risk, the company said, is that Trump would be entitled to vote in his own interest as a controlling stockholder — which may not always be in the interests of all shareholders. Digital World also cited the high rate of failure for new social media platforms, as well as Trump Media’s expectation that it would lose money on its operations “for the foreseeable future.”

Truth Social launched in February 2022, one year after Trump was banned from major social platforms including Facebook and Twitter, the platform now known as X, following the Jan. 6 insurrection at the U.S. Capitol. He’s since been reinstated to both, but has stuck with Truth Social as a megaphone for his message.

 

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Trump Media merger wins investor approval, netting Trump potential windfallTrump will own about 60 percent of the company, which at Digital World’s current share price would be worth about $3.3 billion.
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