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NEW YORK (AP) — donald trump is back on the stock market, and the former president is expected to make a lot of money in the process.
Shareholders of listed shell company Digital World Acquisition Corp. approve Agreement to merge Friday’s vote had a negative impact on President Trump’s media business. That means Trump Media & Technology Group, whose main product is social networking sites. society of truthwill soon begin trading on the Nasdaq Stock Market.
Mr. Trump will own the majority of the combined company, or about 79 million shares. Multiply that by Digital World’s Friday closing price of $36.94, and his total stake could be close to $3 billion.
The green light arrives as the Republican presidential candidate faces his most costly legal battle yet. $454 million verdict in a fraud lawsuit.
But Trump won’t be able to do that. convert into cash The deal is immediate unless the board changes a “lock-up” clause that prohibits insiders from selling newly issued shares for six months.
President Trump’s campaign did not respond to requests for comment.
If a public shell company agrees to acquire a private company, the target company will be listed on a stock exchange once the merger is approved by shareholders. If recent moves in Digital World stock are any indication, Trump Media shareholders could be in trouble.
Many investors in the digital world are not large institutional or professional investors, but small investors who are fans of President Trump or are trying to make money from his mania. Those shareholders more than doubled the stock price this year in anticipation of the merger going through. But on Friday, the stock was down nearly 14%.
Former President Donald Trump’s Truth Social account is seen on a mobile device on Wednesday, March 20, 2024, in New York. (AP Photo/John Minchillo)
Trump’s previous forays into the stock market have not gone well. Trump Hotels and Casino Resorts went public in 1995 under the symbol DJT, and Trump Media will trade under the same symbol. By 2004, President Trump’s casino company had filed for bankruptcy protection and was delisted from the New York Stock Exchange.
Ahead of Friday’s approval, Digital World’s regulatory filing listed many of the risks facing the company’s investors, as well as the risks to Truth Social’s owners if Trump Media also went public. Ta.
One risk, the company said, is that Trump, as a controlling shareholder, has the right to vote in his own interests, but that may not necessarily be in the interests of all shareholders. Digital World also cited the high failure rate of new social media platforms and predicted that Trump Media would be operating at a loss “for some time.”
Trump Media lost $49 million in the first nine months of last year and had to pay $37.7 million in interest on just $3.4 million in revenue.
DWA shareholders also voted Friday to approve seven nominees to Trump Media’s board of directors, including the former president’s son, Donald Trump Jr. That includes Devin Nunes, a former Republican congressman who also serves as the company’s CEO. Robert Lighthizer, who served as President Trump’s U.S. trade representative. Linda McMahon ran the Small Business Administration during the Trump administration. and Kashyap “Kash” Patel, who served as White House National Security Advisor during the Trump administration.
Trump Media and Digital World first announced plans to merge back in October 2021. Federal Bureau of Investigationthe agreement faced a series of lawsuits leading up to Friday’s vote.
society of truth Released in February 2022one year after President Trump. Banned from major social platforms That includes Facebook and Twitter, the platform now known as X, following the Jan. 6 riot at the U.S. Capitol. He later returned to both shows, but remained on Truth Social as a megaphone for his own message.
President Trump promoted Truth Social in a post on his social media network Thursday night, saying, “Truth Social is my voice and the real voice of America!!!” MAGA 2024!!!”
Trump Media has so far not disclosed how many users Truth Social has. However, research firm SimilarWeb estimates there were about 5 million active mobile and web users in February. That’s well below TikTok’s 2 billion-plus and Facebook’s 3 billion, but still higher than other “alternative technology” rivals like Parler. Now offline It’s been about a year, but Gettr, which had less than 2 million visitors in February, is planning a comeback.
Entering the public market means President Trump’s social media business will need to reveal more details soon.
Private companies are responsible to their owners, while public companies are responsible to the shareholders who own the company’s stock. Once published, Trump Media will be required to report quarterly financials and other important news to federal regulators.
In this sense, Truth Social faces some of the same issues that X has been grappling with. mainstream advertisers People who don’t want to be related to hate speech and other controversial content.
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Associated Press writers Stan Cho in New York and Barbara Ortutay in San Francisco contributed to this report.
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