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Investors greenlight Trump’s $5 billion social media deal


:Former US President Donald Trump moved closer Friday to reaping a major windfall from his social media company after investors in a blank check acquisition company approved a value tie-up currently worth around $5 billion.

The deal values ​​Trump’s majority stake in the company that owns his Truth Social app at around $3 billion. The windfall could prove vital as Trump grapples with the financial fallout from a series of lawsuits against him, including a $454 million judgment in a civil fraud case in New York.

Shareholders of Digital World Acquisition Corp (DWAC), the SPAC that plans to take Trump Media & Technology Group public through a merger, voted in favor of the deal on Friday.

Although the next step would be for the deal to be finalized next week, its future remains fraught with uncertainty. Former Digital World CEO Patrick Orlando and former Trump associates Andy Litinsky and Wes Moss separately sued to block the merger, arguing they were entitled to more shares for their work previous on the agreement.

It is unclear how and when these cases will be resolved. Even if the deal is finalized next week, Trump will not be allowed to sell or borrow against any of his shares in the combined company for six months, under terms he previously agreed to.

The deal is also set to provide a vital $300 million cash injection to TMTG. The social media company lost $10.6 million from its operations in the first nine months of 2023, after losing $23.2 million in 2022, and financed itself by borrowing $40.7 million by means of convertible promissory notes which can be repaid in shares.

Based on Digital World’s current stock price, TMTG would be valued at up to $5 billion following its merger with Digital World on an undiluted basis and up to $8 billion on a fully diluted basis which takes into account takes into account the warrants to be exercised and the price supplements. shares to be issued.

Digital World shares have fluctuated wildly and there is no certainty that they will continue to trade at these levels. Shares were down 9 percent at $38.85 Friday morning in New York, amid profit-taking following news of shareholder approval of the deal.

A fully diluted $8 billion valuation for the billion companies combined would be just under half that of Elon Musk’s much more popular social media company, X, and reflects the number of investors who have profited of the agreement to bet on the Trump brand.

In February, Digital World said Truth Social had recorded 8.9 million signups so far. X, by comparison, has more than half a billion monthly users, according to Musk.

Trump has 6.7 million followers on Truth Social, compared to more than 88 million followers on X when the platform permanently suspended him, and the 87.4 million followers he currently has on that platform.


Trump, who is running again for president of the United States, will own between 58.1 and 69.4 percent of the combined company, depending on the level of investor support for the deal.

TMTG was launched with the help of Litinsky and Moss – two former contestants on the TV show “The Apprentice” – as a way for Trump to connect with his supporters after Facebook, Twitter and YouTube removed it at the time. following the attack of January 6, 2021 against the social network. US Capitol.

Digital World announced its merger deal with TMTG in October 2021. Since then, the deal has seen a series of setbacks and delays. Digital World was the target of investigations by the US Department of Justice and the Securities and Exchange Commission (SEC), ousted Orlando as its chief executive officer and reshuffled its board of directors.

In July, Digital World reached an $18 million settlement with the SEC, which said Digital World misled investors by failing to disclose in filings that it had formulated a plan to acquire TMTG and that it was pursuing the acquisition before Digital World’s IPO.

In August, Trump posted on X his mugshot taken while he was detained at the Fulton County Jail in Georgia. He hasn’t posted on X since, using Truth Social as his primary platform to reach voters.


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