Business

Trump unlocks potential $3bn windfall with social media deal

Company behind Truth Social site will list on Nasdaq with the ticker symbol DJT next week

Trump Media & Technology Group, the company behind Trump's Truth Social site, will list on the Nasdaq exchange with the ticker symbol DJT, Trump’s initials, next week. Photograph: AP Photo/Jeff Dean

Fri Mar 22 2024 - 15:41

Donald Trump’s social media business will become publicly-listed after shareholders of a blank-cheque company approved the deal, unlocking a potential $3 billion (€2.8bn) windfall for the former US president as he seeks to cover massive legal liabilities.

Trump Media & Technology Group (TMTG), the company behind his Truth Social site, will list on the Nasdaq exchange with the ticker symbol DJT, Trump’s initials, next week.

The vote comes at a crucial time for Trump, who is facing mounting legal bills ahead of what is expected to be the most expensive election campaign in US history. He has been struggling to raise almost $500 million to prevent assets from being seized as part of the enforcement of a fraud judgment in New York.

Trump is subject to a lock-up agreement that prevents him from selling his shares for six months, but may be able to use his large stake in the business as collateral to borrow money. He could also seek approval from the merged company’s board, which is set to include his son Donald Trump Jr as well as several officials who served in his administration, to start selling his stake immediately to raise cash.

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The vote breaks with a pattern of financial setbacks for Trump and his campaign, which spent more than $52 million on legal battles in 2023. Sustaining the lofty valuation of his social media company could also bolster his image as a successful business person, which has been critical to his electoral appeal but was undermined by the judgment in the New York case.

Shares in Digital World Acquisition Corporation (DWAC), the special purpose acquisition company with which TMTG first announced merger plans in late 2021, were down approximately 4 per cent after Friday’s announcement.

If Trump is allowed to sell some or all of his stake it could put downward pressure on the stock and potentially cause losses for some of the retail investors who piled into DWAC in recent months, more than doubling its share price this year.

The shareholders’ approval of the transaction brings to an end a drawn-out saga that began in October 2021, when DWAC and TMTG announced they had signed a deal to take Trump’s media business public at a $875 million valuation. Little was then known about TMTG other than that it would operate a social media platform to compete with Big Tech rivals such as Twitter and Facebook. But DWAC soared by more than 400 per cent in the days following the 2021 announcement. – Copyright The Financial Times

– Copyright The Financial Times Limited 2024

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