The final obstacles to a two-year-old agreement facilitating the public listing of Donald Trump’s media start-up have been successfully navigated by the U.S. Securities and Exchange Commission. This development holds the potential to significantly enhance Trump’s financial standing, with potential gains reaching as high as $10 billion. The SEC’s blessing of the merger between Trump Media & Technology Group and a blank-check acquisition vehicle means the company can now ask shareholders to back the deal. According to a filing by Digital World Acquisition Corp, the combined company would be valued at as much as $10 billion.
The current valuation is about half that of Elon Musk’s much more popular social media company X, which the tech billionaire bought in late 2022 for $40 billion. But it’s still more than the SEC estimated when the agency vetted the initial deal in 2017.
Investors are also unlikely to associate with Trump’s company, which has been banned by top social media platforms for encouraging supporters to attack federal buildings and other sites. Some hedge funds that invested in the shell company used to launch the Trump-backed deal, dubbed DWAC, have sold their shares to distance themselves from the venture.
If the deal goes through, Trump will become the merged company’s largest shareholder with up to 78 million shares. He will have a lock-up that prevents him from selling the shares until several months after the merger closes, and the new company is likely to be closely tied to his name. According to a filing by Digital World, he will also be forced to sit on a board that includes the new company’s CEO and one-time U.S. Trade Representative, Robert Lighthizer, and the former head of the Small Business Administration, Linda McMahon.
DWAC’s shares, trading as high as $62 per share in recent weeks, soared more than 25 percent Thursday after the SEC’s decision. The news is a surprising turn of events in the long-delayed plan to make the parent of Trump’s social media bullhorn, Truth Social, a publicly traded company.
The companies that will merge to form the new entity have yet to make a clear plan for how they will operate or generate revenue. Still, the combination is expected to bring in $300 million in investor cash, according to the filing by DWAC. The new company is expected to be known as Trump Media & Technology Group, and the new board will include a mix of Trump family members and industry experts. The first earnings report as a public company is due in the spring of 2024. Investors must decide whether to sell off their stakes if the company fails to meet expectations. The stock could be worth as much as $15 billion if it’s successful. Trump’s current personal fortune is estimated at $3.5 billion. By comparison, he has built a real estate empire worth some $25 billion and owns several golf courses and hotels. He will reopen his brand at the New York Cosmopolitan in 2023.
