The Wall Street debut of Donald Trump’s Truth Social network has been making headlines, with the potential to make him billions of dollars on paper. However, the former president may not be able to cash out right away, pending a shareholder vote scheduled for Friday by Digital World Acquisition Corp.
Digital World is a special purpose acquisition company (SPAC) currently trading above $40 per share, driven by excitement surrounding Trump’s involvement. The merger with Trump Media & Technology Group (TMTG) would allow the company to trade on the Nasdaq under a new ticker symbol.
Trump, as the chairman of TMTG, stands to own nearly 58% of the combined company, potentially valued at over $3 billion. However, due to a lock-up provision, he would not be able to sell his shares for at least six months after the merger.
Despite the stock’s high valuation, experts are skeptical about the company’s long-term prospects given its history of losses. TMTG expects to continue losing money for the foreseeable future, raising concerns among investors about the true value of the company.
The board of the new company, which includes individuals put forth by TMTG like Donald Trump Jr. and former Republican Rep. Devin Nunes, may have the power to waive the lock-up agreement after the deal closes. This decision could potentially impact the stock’s price and shareholders’ interests.
As with any investment, there are risks involved, particularly with new social media platforms like Truth Social. TMTG has disclosed multiple risks in its regulatory filings, including Trump’s control as a major stockholder and the company’s history of losses.
Overall, uncertainty looms over the fate of Truth Social and its stock, with investors questioning whether the hype surrounding the company is sustainable in the long run. Trump’s potential windfall is contingent upon the shareholder vote on Friday and the company’s ability to navigate the complex landscape of Wall Street.
Source link
