The US Securities and Exchange Commission (SEC) has approved a merger between Donald Trump’s social media platform Truth Social and acquisition vehicle Digital World Acquisition Corp (DWAC.O) that could see a $10 billion valuation of Truth Social’s parent company Trump Media & Technology Group. DWAC must now have a shareholder vote on the merger to approve it on their end.
This process would also register Trump Media as a publicly traded company and make available $300 million in investor funds. Shares for Digital World increased by 16 percent to $50.49 on Thursday following the news. If the merger succeeds and shares remain at this price, Trump’s stake would be around $4 billion.
The deal’s stock market valuation has tripled since January. Trump’s estimated ownership of the combined company will be between 58.1 percent and 69.4 percent, depending on investor backing.
🚨BREAKING: The SEC has approved the merger of $DWAC and Truth Social. President Trump is expected to profit almost 4 BILLION dollars given his 58% stake in the company and the current stock price.
The leftists trying to bankrupt Trump are in shambles. pic.twitter.com/3VB1xNjjAY
— Pro Swing Trading 📈😎🇺🇸 (@Pro__Trading) February 16, 2024
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A reporter for Reuters suggests that the investors are fans of the former president and are knowingly investing in a company experiencing losses out of dedication to his political cause.
According to a regulatory filing from DWAC on Wednesday, Trump could potentially end up divesting his stake in Truth Social based on the outcome of his 2024 presidential campaign. In that scenario, he would also resign from any form of managerial duties regarding the platform. But as it stands, Trump would have unlimited control over the company, as a previous filing states that no political activity would qualify as a breach of agreement. Trump will be able to elect board members, veto articles that would normally be up to shareholder vote, and have powers over acquisitions.
DWAC had said in June 2022 that the SEC was asking for additional documentation on the merger, in particular any “communications regarding and due diligence of potential targets other than” Trump’s company.
Shane Devine is a writer covering politics, economics, and culture for Valuetainment. Follow Shane on X (Twitter).
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