Trump's Truth Social company completes merger that could net him over $3 billion
But the deal has a provision that keeps him from immediately selling his shares.
Donald Trump's social media company Truth Social completed a merger Friday morning that could net the former president over $3 billion.
Shareholders of Digital World Acquisition Corporation -- a special purpose acquisition company -- approved a merger with Trump Media & Technology Group (TMTG), which owns Truth Social.
The company can begin trading as a public company, with the stock symbol DJT on Nasdaq, as early as next week.
Shares in DWAC currently stand around $40 per share.
"We are immensely grateful to our stockholders and our working group for their continued trust and support. This vote underscores their confidence in the merger with TMTG and the path we have set for the future. With many of our headwinds behind us, we look forward to working with TMTG and our dedicated team to close this merger," said Eric Swider, CEO of Digital World.
With Trump owning 58.1% of the common stock in the company, the former president stands to make over $3 billion from the deal depending on how the stock ultimately trades. Experts say it represents a staggering valuation for a social media company that ranks below major competitors like Facebook, X and TikTok.
"This accomplishment shows the unshakeable commitment of Digital World, its investors, and the entire Truth Social workforce to creating a movement to defend free expression on the Internet. As we transition into a public company, we look forward to greatly enhancing and expanding Truth Social and providing Americans with an enduring safe harbor from Big Tech's stifling censorship and suppression," TMTG CEO Devin Nunes said in a statement.
However, the deal currently includes a lockout provision that prevents Trump from immediately selling or getting loans based on his shares -- potentially limiting Trump's ability to use the windfall as collateral for a bond in his $464 million civil fraud judgment.
Trump faces a Monday deadline to secure a financial guarantee to cover the judgment, after a New York judge in February ordered him to pay $464 million in disgorgement and pre-judgment interest when he found the former president and his adult sons liable for using "numerous acts of fraud and misrepresentation" to inflate his net worth in order to get more favorable loan terms.
Trump has denied all wrongdoing and has appealed the decision in the case.
Securities and Exchange Commission filings associated with the merger of Digital World Acquisition Corporation and Trump Media & Technology Group offer a picture of a cash-strapped company that has struggled to reach profitability.
In the first nine months of 2023, Trump Media brought in less than $3.4 million in revenue while losing $49 million, according to the filings. The company's filings suggest the company lacks data for measuring the success of its social media platform, faces increased operating risks and is inextricably tied to the former president.
Trump Media expects to continue operating at a loss "for the foreseeable future," and leadership acknowledges that new social media platforms have a high rate of failure, according to the filing.
The company would likely suffer if Trump "were to cease to be able to devote substantial time to Truth Social," according to the filing.
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