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Donald Trump, facing a substantial fraud fine, might find a lifeline in the stock market through Truth Social, his social media platform. The platform’s parent company, Trump Media, is set to go public following a merger with Digital World Acquisition Corp (DWAC).
If approved, the merger would make Trump the largest shareholder in the combined entity, with a stake exceeding 58%, valued at over $3 billion based on DWAC’s current share prices. Despite concerns about the deal’s viability, including warnings from auditors and legal issues, individual investors, many believed to be Trump supporters, are enthusiastic about it.
The merged company is expected to trade on the Nasdaq under the ticker DJT, but immediate relief for Trump’s financial woes, such as the fraud fine, is unlikely. He faces restrictions on selling his shares for at least six months, although an exemption could be granted. Analysts suggest that leveraging the shares for a loan may also be challenging due to perceived risks.
While some see the deal as a potential boon for Trump, others caution about the significant risks involved. DWAC’s share price, although down from its peak, still implies a substantial valuation for Trump Media, despite its modest revenue and user base. Some analysts view DWAC as a “meme stock,” divorced from fundamental metrics and likely to decline eventually.
Despite uncertainties, Trump stands to benefit greatly from the merger, which some view as a substantial transfer of value from investors to Trump himself. However, the long-term viability of Trump Media and its impact on Trump’s financial standing remain to be seen.
