Donald Trump could be on the brink of a massive payday, worth up to $3.5 billion, thanks to a crucial vote happening this Friday. Shareholders of Digital World Acquisition Corp. (DWAC) are deciding whether to merge with Trump’s media company, potentially putting his social media platform, Truth Social, on the stock market. This move comes after receiving the green light from regulators about a month ago.
DWAC, a special purpose acquisition company, aims to take Trump’s media venture public, bypassing the traditional IPO route. If the merger goes through, Trump will control nearly 59% of the new entity, named after himself, with his stake potentially valued at billions, based on current stock prices.
The potential merger has sparked interest among Trump’s supporters, with a notable group on Truth Social actively discussing the stock’s prospects. This enthusiasm could be influencing DWAC’s share price at a critical time for Trump, who is facing significant financial pressures, including a hefty civil fraud judgment and mounting legal expenses.
However, even if the merger succeeds and boosts Trump’s finances, he won’t be able to cash in immediately. A “lock-up” agreement restricts major shareholders from selling their stock for at least six months, aiming to prevent a sudden drop in share price from large sell-offs.
There’s speculation about whether Digital World might waive this lock-up agreement, but doing so could attract legal scrutiny. After the lock-up period, Trump could sell his shares gradually to avoid destabilizing the stock price.
While Trump’s stake is currently estimated at $3.5 billion, the actual value could fluctuate. The success of the merged company, especially its flagship product, Truth Social, will be crucial. The platform faces stiff competition from established social media giants and has so far reported modest revenues and significant losses.
Experts caution against overestimating the long-term value of Trump’s media company, given its current financial performance. Additionally, Trump’s potential stock sales post-lock-up could impact the company’s share price and his financial recovery, especially as he navigates legal challenges and campaign funding.
