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Former President Donald Trump’s comeback to Wall Street is gaining momentum as US regulators greenlight a controversial merger between Truth Social owner Trump Media & Technology Group and a blank-check company. This move, after years of regulatory hurdles, positions Trump to potentially amass a fortune and reclaim his spot in the financial limelight.
The Securities and Exchange Commission’s approval of the merger removes a significant barrier, propelling Trump Media towards becoming a publicly-traded entity. With Trump expected to retain a dominant stake, estimated to be worth billions, the merger signifies a pivotal moment in his post-presidential endeavors.
Digital World Acquisition Corp., the blank-check firm involved, saw its shares surge by 15% following the SEC’s nod—a testament to investor optimism fueled by Trump’s political resurgence and the progress of the merger. Finance professor Jay Ritter estimates that the infusion of approximately $270 million into Trump Media could fuel the growth of Truth Social, the company’s flagship platform.
Trump’s significant position in the merged entity, comprising roughly 79 million shares, underscores the potential for substantial wealth accumulation, with his stake valued at around $4 billion based on Digital World’s current trading price.
However, realizing this paper wealth may prove challenging for Trump, given restrictions imposed by lock-up periods and the company’s reliance on his reputation. Furthermore, questions loom over the sky-high valuation assigned to Trump Media, described as a “meme stock” by Ritter, due to its minimal revenue and cash burn rate.
Despite these uncertainties, Trump Media executives heralded the SEC’s approval as a triumph for free speech and vowed to forge ahead with their mission to challenge Big Tech’s dominance. Digital World’s CEO echoed this sentiment, hailing the approval as a significant milestone.
The final hurdle lies in securing approval from Digital World shareholders—an outcome crucial to avoiding liquidation and preserving shareholders’ stakes. Analysts emphasize the importance of this vote, noting the stark contrast between the market value and the potential outcome of failure.
As Trump’s financial saga unfolds, investors brace for volatility, with Trump’s personal fortunes and political trajectory poised to influence Trump Media’s share price. Trump’s checkered history in finance, marked by bankruptcies tied to Atlantic City casinos, adds a layer of complexity to his Wall Street comeback narrative.
