The SEC has approved the registration statement for former President Donald Trump’s media firm, Trump Media & Technology Group, to merge with Digital World Acquisition Corp. (DWAC), which owns the Truth Social platform. Trump stands to potentially gain a windfall despite ongoing legal and financial woes.
The fine print of the merger agreement reveals Trump’s potential control over the new entity, New Digital World, with an estimated 58.1% voting power and outstanding shares, solidifying his influence within the company.
Based on DWAC’s closing price of $50.56 on Thursday, Trump could secure over 78 million shares, valued at approximately $3.94 billion, signaling a significant financial upturn for the embattled former president.
It’s important to note that other investors in the SPAC stand to gain from an earnout linked to stock performance, offering TMTG shareholders the potential to receive up to 40 million additional New Digital World common shares if certain performance milestones are met in the first three years post-merger.
However, a six-month lock-up period delays Trump’s access to the New Digital World shares, postponing any potential income source in the near term.
The completion of this much-anticipated merger offers a possible financial infusion for Trump as he contemplates a return to the political arena and deals with substantial legal expenses from various criminal and civil cases, including those initiated by author E. Jean Carroll, who is seeking $89 million in damages.
The SEC’s scrutiny of the merger deal, which led to an $18 million penalty and revised corporate filings for Digital World, instills confidence in the company’s regulatory compliance and positions it to move forward with the merger process.
Digital World is expected to announce a date for a special shareholder meeting, crucial for finalizing the proposed merger closely watched by investors and the public.
Despite lingering legal challenges and financial pressures, Trump remains a prominent figure in national politics and a frontrunner for the Republican nomination in the next election, evident in his lead over President Joe Biden in hypothetical matchups.
