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Truth Social to Go Public

Trump’s Media Venture Set to Hit the Stock Market Amidst Legal Struggles

Posted on March 25, 2024
Writer: James Miller

Shareholders of Digital World Acquisition Corp. approved a merger with Donald Trump’s Truth Social, enabling the former president’s company to debut on the Nasdaq. With nearly 79 million shares to his name, Trump’s stake is poised to escalate to almost $3 billion.

Before the vote, Digital World disclosed numerous investment risks in its filings, including challenges that would emerge once Trump Media, owner of Truth Social, becomes publicly traded.

The company highlighted the risk of Trump acting in his capacity as a controlling shareholder to prioritize his own interests, which might not align with those of all investors. Additionally, Digital World pointed out the generally high failure rates of new social media ventures and forecasted that Trump Media would continue to incur losses from its operations for an extended period.

In the first nine months of the previous year, Trump Media reported a $49 million loss, with revenue at merely $3.4 million against interest expenses of $37.7 million.

The merger unfolds as Trump, seeking another bid for the presidency, grapples with a substantial legal and financial hurdle — a $454 million judgment in a fraud lawsuit. A “lock-up” provision bars him from liquidating his shares for six months unless the company’s board intervenes.

Market speculation swirls around the merger, particularly among Trump supporters and individual investors, fueling stock volatility. Trump’s prior foray into the stock market with Trump Hotels and Casino Resorts ultimately led to bankruptcy.

For more information, read the full article on AP News.

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