Shareholders voted on Friday to approve a merger between former President Donald Trump’s media company and Digital World Acquisition Corp. to take the company public, The New York Times reports.
The company, which owns Trump’s Truth Social platform, will trade on the stock market. The deal is expected to inject more than $300 million into Trump Media, which has “all but exhausted its available cash,” and allow Truth Social to keep operation, according to the report.
The deal puts the company’s valuation at more than $5 billion, meaning Trump’s personal stake will be worth more than $3 billion, according to the report.
The deal comes as Trump faces a Monday deadline to pay the $454 million judgment in his New York fraud case or post bond in order to appeal the ruling. But Trump can’t use the cash from the deal to pay the penalty because he is restricted for six months from selling any of his shares or using them as collateral for a loan, The Times reported, though he could ask the board of the merged company to waive that rule for him.
“Any lockup change or waiver will be decided by the post-merger company’s board, which will be stacked with Trump allies,” The Washington Post reported, including Trump’s son Donald Jr., and former administration officials Robert Lighthizer, Linda McMahon and Kash Patel.
But even if Trump gets a waiver, he wouldn’t be able to sell more than a small fraction of his stake at any given time — up to 1% of the outstanding shares every quarter, Politico reported. And if he eventually seeks to unload a large quantity of stock it could scare off investors and hurt the company’s value because “it’s simply trading on Trump’s name,” Kristi Marvin, founder of research firm SPACInsider, told the outlet.
“Critics have said Trump Media is a ‘meme stock’ with a more than $6 billion valuation they say is out of sync with its financial outlook. Trump Media lost $49 million in the first nine months of last year and brought in $3.4 million in revenue,” the Post reported.
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