Donald Trump’s social media venture, Truth Social, took a significant step towards going public as investors greenlit plans for its merger with Digital World Acquisition, a special purpose acquisition company (SPAC). This move is expected to net the former president a paper fortune estimated at $3 billion.
Despite Truth Social’s lackluster performance since its launch in 2021, generating only around $5 million in sales, Trump’s supporters rallied behind Digital World Acquisition, driving its stock price up by 145% since the beginning of the year. This surge in stock value pushed the firm’s valuation to approximately $6 billion.
Upon completion of the merger, the combined entity will trade on the stock market under the name Trump Media & Technology Group, with the ticker symbol “DJT” reflecting Trump’s initials. Trump’s stake in the newly formed company is estimated at 79 million shares, translating to a value of about $3 billion. However, Trump will not be able to immediately liquidate his stake as key shareholders are subject to a six-month lock-up period.
Despite the excitement surrounding the merger, Digital World’s stock price experienced significant volatility, dropping by nearly 14% following the shareholder vote. This raises concerns about the performance of Trump Media on the stock market until Trump can sell his stake.
The merger with Digital World comes at a critical time for Trump, who faces financial challenges amid legal battles and mounting debts. Nevertheless, the Digital World has been propelled into the spotlight as a “meme stock,” fueled by internet memes encouraging retail investors to invest in it.
Originally announced in 2021, Digital World’s merger with Trump’s media firm faced several legal hurdles along the way. While the stock’s recent surge is largely attributed to speculation rather than underlying fundamentals, its fate remains intertwined with Trump’s political ambitions, particularly his bid to reclaim the presidency in the upcoming elections.
