The Securities and Exchange Commission (SEC) has given its nod to a merger between Trump Media & Technology Group (TMTG), the parent company of Truth Social, and special-purpose acquisition company Digital World Acquisition Corp. (DWAC). This merger values TMTG at a staggering amount of up to $10 billion.
Following the merger, pending acceptance by shareholders, Trump Media will be able to go public. Donald Trump, the former US President, is set to own a gigantic stake in the merged company, anticipated to be worth $4 billion. The 79 million shares held by Trump in this entity will make him the principal investor.
Despite doubts surfacing around Truth Social’s financial stability and customer base, the merger's market value has seen a threefold increase since the beginning of the year. This sharp rise is attributed to Trump's mounting prominence in the race for the Republican presidential nomination. Based on the level of investors' backing, Trump's stakes in the merged entity may range from 58.1% to 69.4%.
Digital World has indicated that Trump might divest his shares and withdraw from overseeing Truth Social, contingent on his presidential aspirations. The future board of the post-merger company is expected to comprise several individuals associated with Trump, such as Donald Trump Jr., Robert E. Lighthizer, Linda McMahon, and Kash Patel.
In the aftermath of agreeing to a merger deal with TMTG in October 2021, Digital World met with several obstacles: investigations by the Department of Justice, leadership reshuffling, and regulatory hurdles. These culminated in an $18 million settlement payment to the SEC to resolve accusations of defrauding investors and infringing upon antifraud laws related to initial merger plans.
