Shareholders Approve Truth Social Merger; Trump’s Social Media Company To Go Public
PALM BEACH, FLORIDA - MARCH 05: Republican presidential candidate and former President Donald Trump arrives for an election-night watch party at Mar-a-Lago on March 5, 2024 in West Palm Beach, Florida. Sixteen states held their primaries and caucuses today as part of Super Tuesday.
Win McNamee/Getty Images

Truth Social, the social media company founded by former President Donald Trump, is set to go public as soon as next week after shareholders voted Friday to approve a merger with a shell company.

The merger means those who hold stock in Digital World Acquisition, a special-purpose acquisition company (SPAC), will now be shareholders of Trump Media & Technology Group, the parent company of Truth Social, The New York Times reported. The deal will also provide Trump Media with more than $300 million, and the company will replace Digital World Acquisition on the stock market under the ticker DJT, Trump’s initials.

Based on Digital World Acquisition’s current price of nearly $42 a share, Trump Media will hit the market with a value of around $5 billion, meaning Trump’s 60% stake in the company will boost his net worth by more than $3 billion. Thanks to Trump supporters turning Digital World Acquisition into a “meme stock,” shares for the company have skyrocketed since January, moving up from around $17 to where it currently stands at around $42.

While the former president stands ready to make billions of dollars, the merger likely won’t result in an immediate windfall for him. The former president would have to hold his shares for six months before he could sell any of them unless Digital World Acquisition waives its agreement, The Washington Post reported. But even if the agreement were waived, the potential of the company’s largest stockholder dumping his holdings could tank the stock price.

The Truth Social deal, which could provide Trump with an extra source of cash, comes before the Monday deadline set by Judge Arthur Engoron for Trump to post bond in the $454 million civil business fraud judgment against him. However, some remain skeptical about Trump’s chances to rake in billions from the deal even with the Trump Media’s current valuation of over $5 billion.

University of Florida Finance Professor Jay Ritter told the Post that the current value of the merged company doesn’t line up with the actual performance of the company, Trump Media. Ritter called Trump Media “a money-losing company that generates less than $5 million per year,” adding that Digital World Acquisition appears to be “a classic meme stock, whose price is totally unrelated to the underlying fundamentals.”

Over the first nine months of 2023, Trump Media reported a net loss of $49 million on $3.38 million in revenue, according to Axios.

Earlier on Friday, Trump posted on Truth Social that he now has $500 million cash on hand ahead of the Monday deadline to post bond for the $454 million judgment.

“Through hard work, talent, and luck, I currently have almost five hundred million dollars in cash, a substantial amount of which I intended to use in my campaign for president,” Trump wrote. “The often overturned political hack judge on the rigged and corrupt A.G. case, where I have done nothing wrong, knew this, wanted to take it away from me, and that’s where and why he came up with the shocking number which, coupled with his crazy interest demand, is approximately $454,000,000. I did nothing wrong except win an election in 2016 that I wasn’t expected to win, did even better in 2020, and now lead, by a lot, in 2024. This is communism in America.”

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The Daily Wire   >  Read   >  Shareholders Approve Truth Social Merger; Trump’s Social Media Company To Go Public