Former President Donald Trump’s return to the stock market is imminent as shareholders of Digital World Acquisition Corp. are set to vote on a merger with Trump’s media business, allowing Trump Media & Technology Group to trade on the Nasdaq stock market under the flagship product Truth Social. If the deal is approved, Trump could potentially earn over $3 billion from his ownership of nearly 79 million shares in the combined company. However, due to a “lock-up” provision, Trump may not be able to immediately cash out his windfall.
Trump’s previous stock market venture with Trump Hotels and Casino Resorts, which went public in 1995, took a downward turn leading to bankruptcy and delisting from the New York Stock Exchange by 2004. Digital World has highlighted various risks for investors in the merger, including Trump’s control over voting decisions as the majority shareholder and the high failure rate of new social media platforms. Despite Truth Social’s launch after Trump’s ban from major social platforms in 2022, the platform is still in its early stages with about 5 million active users in February, showing potential for growth but facing competition from larger platforms like TikTok and Facebook.
Although Trump Media expects to operate at a loss in the near future based on its financial records, the merger with Digital World represents a significant opportunity for Trump to expand his media presence. The path to public trading for Truth Social is paved with legal challenges and regulatory scrutiny, underscoring the complexities of merging a controversial figure’s media enterprise with a public shell company. As the deadline for the shareholder vote approaches, the outcome will likely shape the trajectory of Trump’s media ambitions and financial standing in the stock market.
