Donald Trump’s social media company, Truth Social, is set to go public – potentially netting the former US president $3bn.
It means Trump Media & Technology Group (TMTG), whose flagship product is the social networking platform, will soon begin trading on the Nasdaq stock market.
In a vote held on Friday, Digital World Acquisition Corp, a publicly traded shell company, approved a deal to merge with Mr Trump’s media business.
The deal values his majority stake in the company at about $3.6bn (£2.8bn).
The windfall could prove vital as Mr Trump grapples with the financial fallout of a string of legal cases against him, including a $454m (£356m) judgment in a civil fraud case in New York.
Truth Social was launched in February 2022, a year after Mr Trump was booted from major social media platforms following the insurrection that took place at the US Capitol. He’s since been reinstated but has stuck with Truth Social as a megaphone for his messages.
Meanwhile, Digital World’s former CEO Patrick Orlando, and former Trump business associates Andy Litinsky and Wes Moss have separately sued to block the merger.
They have argued they were entitled to more shares for their previous work on the deal and it isn’t clear when these cases will be resolved.
Even if the deal gets completed next week, Mr Trump will not be allowed to sell any of his shares, or borrow against them, due to a “lock-up” provision that prevents company insiders from selling newly issued shares for six months.
Earlier this week, Mr Trump was hit with the $454m fine after being found guilty of scheming for years to deceive banks and insurers by inflating his wealth on financial statements used to secure loans and make deals.
Mr Trump, who has secured the Republican nomination for this year’s general election, has frequently claimed to be worth billions of dollars and last year said he had $400m (£317m) in cash, in addition to properties and other investments.
It was this that led to his lawyers saying he couldn’t find the bond money to pause enforcement against him.
But the deal will deliver a much-needed $300m (£238m) cash infusion into TMTG.
In the first nine months of operations in 2023, the company lost $10.6m (£8.4m), after losing $23.2m (£18.4m) in 2022. It has been funding itself by borrowing $40.7m (£32.3m).
Mr Trump’s previous foray into the stock market didn’t end well. Trump Hotels and Casino Resorts went public in 1995 and less than 10 years later, in 2004, his casino company had filed for bankruptcy protection and was delisted from the New York Stock Exchange.
