Former President Donald Trump’s nascent social media venture, Truth Social, operated by Trump Media & Technology Group (TMTG), has taken a significant step into the public domain. Starting Tuesday, investors can trade shares under the ticker symbol “DJT” on Nasdaq, following the merger with Digital World Acquisition Corp. (DWAC), a special purchase acquisition company (SPAC).
With an eye-catching ticker symbol that mirrors Trump’s initials, this business move once again places Trump at the center of a publicly traded company. The transition to the public markets is a strategic one, bypassing the traditional initial public offering process, which involves DWAC, a shell company designed for such mergers.
The choice of the “DJT” ticker is “so on brand” for Trump, as Kristi Marvin, chief executive of SPACInsider.com, highlights. After the merger, the company’s valuation could exceed $5 billion, a notable figure considering TMTG’s reported revenue of $3.3 million for the first nine months of 2023.
The fortunes of Truth Social and TMTG are deeply intertwined with Trump’s own financial prospects. The former president is estimated to own nearly 79 million shares of the combined entity, which could be valued at nearly $3 billion based on recent stock performance. However, amid legal battles and significant financial liabilities, this paper wealth is not immediately accessible.
The SPAC merger approval coincides with a complex period for Trump, who faces a myriad of legal issues, including a substantial judgement in a fraud lawsuit. Moreover, provisions within the merger agreement prevent Trump from selling his shares for a six-month “lock-up” period, although the new company’s board could potentially waive this restriction.
Digital World’s stock has exhibited volatility, attributed in part to a base of retail investors motivated by affinity for Trump or speculative fervor, rather than traditional investment rationale. This dynamic contributed to DWAC shares experiencing a pronounced surge, jumping to close at $49.95 on Monday, marking nearly a threefold increase since the beginning of the year.
Looking into the past, this isn’t the first time Trump has ventured into the public market with the ticker DJT. His previous stint, with Trump Hotels & Casino Resorts, began well but ended in bankruptcy in 2004, a track record that hangs over the current merger.
Trump Media’s financial disclosures, which will become mandatory with its public status, could cast light on the true health of Truth Social. As of February, the platform had around 5 million active users, a number dwarfed by industry giants but notable among alternative tech platforms.
Relevant articles:
– Trump’s Truth Social to start trading under the ticker “DJT” on Tuesday
– Trump’s social media company approved to go public, potentially netting former president billions, The Associated Press, Fri, 22 Mar 2024 23:24:00 GMT
– What You Need to Know Ahead of Truth Social Owner Trump Media’s Trading Debut Tuesday, Investopedia, Mon, 25 Mar 2024 20:30:52 GMT
– Trump’s media stock will start trading Tuesday. Here’s what to know., NBC News, Mon, 25 Mar 2024 17:59:01 GMT