Digital World Acquisition Corp. (DWAC) shareholders approved a merger with former President Trump’s media startup, Truth Social, on Friday, paving the way for the company’s stock market debut and a potential $3.5 billion windfall for Trump.
The Securities and Exchange Commission (SEC) approved the long-delayed merger between the blank check company and Trump Media & Technology Group (TMTG) last month.
Given his over 79 million shares in the newly amalgamated corporation, Trump stands to profit by approximately $3.5 billion from the transaction.
The stock’s value has fluctuated throughout Friday, beginning at around $44 per share, climbing as high as $46.70 and decreasing as low as $38.12 before settling near $41 soon before midday.
The potential profit comes as the former president battles to obtain a $464 million bond in his New York civil fraud prosecution. Trump’s attorneys conceded earlier this week that it was “impossible” to post the entire appeal bond due to a lack of funds on hand.
Should Trump fail to secure the half-billion-dollar bond by Monday, the New York Attorney General’s Office may seize his assets. After filing judgments in Westchester County, the New York Attorney General’s Office took the initial step toward seizing Trump’s golf resort and private home known as Seven Springs.
The first step in attempting to collect Trump’s properties is to get a judgment in the counties where they are located.
A judgment has already been recorded in New York City, the location of Trump’s civil fraud trial, as well as his iconic 40 Wall Street and Trump Tower properties.
Despite the potential bonanza, Trump will not be able to access the funds right away because of a rule that prohibits insiders from selling new shares for six months.
Since talks began in October 2021, there have been various delays in the merger to bring Trump’s Truth Social platform to the to the public.
A former DWAC board member and two others faced insider trading charges last June for allegedly making $22 million by buying company stock before the merger announcement.
The SEC also fined the business $18 million in July for allegedly deceiving investors and the agency by failing to disclose that DWAC’s future CEO and board chair had been in talks with TMTG prior to coming public.
In regulatory papers ahead of Friday’s shareholder vote, DWAC cited previous disputes with the SEC as a possible danger.
It also identified Trump’s involvement with TMTG as a risk concern, stating that the company’s “success depends in part on the popularity of its brand and the reputation and popularity” of the former president.
Because Trump will own roughly 60% of the new company’s shares, DWAC warned that he will be able to influence things put to investors for approval and that his interests may not always line up with those of the other owners.
Former firm executives, including TMTG co-founders Andy Litinsky and Wes Moss and former DWAC chair and CEO Patrick Orlando, are also suing for the merger.
Litinsky and Moss accused TMTG of aiming to diminish their ownership in the company, while Orlando sued DWAC for a larger share of the merger proceeds, according to The Washington Post. DWAC sued the former chairman earlier this week, attempting to force him to vote in favor of the purchase.
