Donald Trump’s Truth Social to Merge with Financial Company for $4 Billion Pay Out

The US Securities and Exchange Commission (SEC) has approved a merger between Donald Trump’s social media platform Truth Social and acquisition vehicle Digital World Acquisition Corp (DWAC.O) that could see a $10 billion valuation of Truth Social’s parent company Trump Media & Technology Group. DWAC must now have a shareholder vote on the merger to approve it on their end.

This process would also register Trump Media as a publicly traded company and make available $300 million in investor funds. Shares for Digital World increased by 16 percent to $50.49 on Thursday following the news. If the merger succeeds and shares remain at this price, Trump’s stake would be around $4 billion.

The deal’s stock market valuation has tripled since January. Trump’s estimated ownership of the combined company will be between 58.1 percent and 69.4 percent, depending on investor backing.

reporter for Reuters suggests that the investors are fans of the former president and are knowingly investing in a company experiencing losses out of dedication to his political cause.

According to a regulatory filing from DWAC on Wednesday, Trump could potentially end up divesting his stake in Truth Social based on the outcome of his 2024 presidential campaign. In that scenario, he would also resign from any form of managerial duties regarding the platform. But as it stands, Trump would have unlimited control over the company, as a previous filing states that no political activity would qualify as a breach of agreement. Trump will be able to elect board members, veto articles that would normally be up to shareholder vote, and have powers over acquisitions.

DWAC had said in June 2022 that the SEC was asking for additional documentation on the merger, in particular any “communications regarding and due diligence of potential targets other than” Trump’s company.

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