Former President Donald Trump is making a return to the stock market with his media business, Trump Media & Technology Group, set to begin trading on the Nasdaq stock market. Shareholders of Digital World Acquisition Corp., a publicly traded shell company, approved the merger with Trump’s media business in a Friday vote, paving the way for Trump to own nearly 79 million shares of the combined company, valued at nearly $3 billion.
However, Trump won’t be able to cash out immediately due to a “lock-up” provision that prevents insiders from selling shares for six months. The approval comes at a time when Trump is facing a costly legal battle, with a $454 million judgment in a fraud lawsuit.
The merger has attracted small-time investors who are either fans of Trump or looking to capitalize on the mania, leading to a surge in Digital World’s stock price. But recent activity saw the shares drop almost 14% on Friday.
Trump’s previous venture into the stock market with Trump Hotels and Casino Resorts ended in bankruptcy in 2004. The regulatory filings for the merger highlight risks for investors, including Trump’s controlling stake and the company’s expectation of continued losses.
The merger also includes a board slate that includes Donald Trump Jr., former Rep. Devin Nunes, and other Trump allies. Trump Media and Digital World first announced their merger plans in October 2021, facing legal challenges and a federal probe along the way.
Truth Social, Trump’s social networking site, launched in February 2022 as an alternative to mainstream platforms. While user numbers have not been disclosed, research firm Similarweb estimates around 5 million active users in February.
As Trump Media goes public, it will be required to disclose quarterly finances and other material news to federal regulators, facing similar challenges to mainstream platforms in terms of content moderation and advertiser relations.
The approval of the merger marks a significant milestone for Trump’s media business, setting the stage for its public debut on the stock market.
