Former President Donald Trump achieved great success this Friday by scoring an unexpected profit. Spreading false and apocalyptic messages is a lucrative business.
His social network managed to get the shareholders of a cash-rich shell company (Digital World Corp) to give the green light to the merger of the two. This can provide him with about 3 billion dollars once the shares debut on the stock market starting next week under the symbol DTJ, the name of the now Republican candidate for the White House.
Trump will thus receive a large cylinder of oxygen at a time when he faces the danger that, next Monday, the state of New York will begin the seizure of some of his properties to pay the sentence of 454 million dollars for defrauding the banks imposed on him by a Manhattan civil court. Nobody has wanted to endorse him.
He could use this unforeseen money to pay his debts, although it seems impossible that this large injection of capital could avoid embargo due to a regulatory issue in stock market operations.
With the approval of the merger, the shareholders of that company will become shareholders of Trump Media
In a statement issued before the vote, Trump Media said that “the merger will allow us to improve and expand our platform.” Trump himself proclaimed: “Truth Social is my voice and the true voice of America.”
Starting at Digital World’s $44 share price, the media company that Trump will lead can reach a market value of up to $5 billion. This means that his personal bet will be worth more than 3 billion. Trading on the stock market could begin on Monday. There was already a setback since when the agreement was announced, Digital World shares lost five dollars per title.
The rules establish, however, that the former president is restricted for six months from selling any of those shares or using them as collateral to request loans, although he has the possibility of asking the board of directors of the merged company to suspend this regulation.
The former president’s allies and company executives will also be awarded stock packages through the merger worth millions of dollars. But trading on the stock market opens the company to even greater scrutiny, and any decline in share prices will affect the value of those securities.
Critics considered that Trump Media is based on “meme stocks,” with activity on the social network and a large number of bets on the decline in the price of those stocks. These analysts pointed out that a valuation of more than 6,000 million is out of sync with their financial projection.
This social network lost 49 million in the first nine months of last year and generated 3.4 million in revenue, according to the documentation delivered by Digital World to the US Securities and Exchange Commission (SEC).
Truth Social has become Trump’s great speaker and virtual meeting place for his followers. Although he launched it as an alternative to Twitter (today X), the platform retains a small fraction of the audience he achieved with his tweets. He has 6.7 million followers, compared to the 88 million he reached with Twitter at the beginning of 2021, when he incited the coup d’état and was expelled from that network. Once Elon Musk bought it, he received forgiveness. The former president remained faithful to his own business.
