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If the decline accelerates in the coming weeks, Mr. Trump’s majority stake in the new combined company, called Trump Media, will be worth slightly less than the $3 billion or so it was estimated before shareholders agreed to the deal on Friday. It may be lower.
DWAC’s stock price hit a 52-week high of $58.72 per share on January 23, just before the shareholder vote, as the long-stalled merger appears increasingly likely to materialize. At the start of trading on Friday morning, the stock had fallen to $44.20 per share.
DWAC stock closed Friday afternoon trading at $36.94 per share.
In after-hours trading, the stock price recovered slightly to $38.55 per share. However, it was still 12.7% lower than Friday’s opening price.
The decline raises questions about whether Trump Media & Technology Group, which is merging with DWAC, will ultimately be able to generate significant revenue, and whether President Trump will seek to cash out the stock early, citing a number of legal issues. This may reflect concerns that this may be the case.
TMTG, which owns the Trump Social Platform, which President Trump used to express his love for the app on Saturday, reported losses of nearly $50 million in the first three financial quarters of 2023. Revenues for the period were less than $3.5 million.
Meanwhile, President Trump faces more than $500 million in civil legal judgments in federal and state court in New York, as well as Litigation costs have increased due to litigation and four criminal prosecutions.
Last week, Trump’s lawyers said in a court filing that Trump does not have the cash to obtain an appeals bond to secure a $454 million fraud judgment in one of those cases. He said no. This would, for now, prevent the New York State Attorney General’s Office from collecting the award.
Under the terms of the merger, Mr. Trump, who owns at least 58% of Trump Media stock, will be prohibited from selling any shares in the company for six months.
But the new board, which will include his son Donald Trump Jr. and other close allies, will vote to lift the restrictions, potentially allowing him to sell stock to cover legal costs. There is.
As a result, Trump Media’s stock price will fall, and other shareholders may sell their shares, causing the stock price to fall further.
Trump Media plans to use the ticker symbol DJT when it begins trading on the Nasdaq stock market as early as next week.
The same ticker was also used by Trump’s previous public company, Trump Hotels & Casino Resorts, whose shares have traded on the New York Stock Exchange since 1995.
The company lost money every time it operated, eventually filing for bankruptcy protection in 2004 and being delisted from exchanges the same year.
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