Shareholders on Friday approved a merger between former President Donald Trump’s media company and a publicly traded shell company, delivering a potential windfall to the presumptive GOP presidential nominee when he needs it the most.
Digital World Acquisition Corp. approved the deal with Trump Media & Technology Group, the parent company of the Truth Social platform. The entity will be publicly traded on Nasdaq under the ticker DJT.
The shell company is a special purpose acquisition company, or SPAC.
Mr. Trump would own up to 69% of the shares of the new parent company. The shares could be worth nearly $4 billion, though experts say that may be inflated — akin to meme stocks that generate buzz but don’t have reliable value.
Importantly, Mr. Trump and other Trump Media shareholders are subject to a lockup provision that prevents them from selling their shares for six months.
The former president is reportedly scrambling to meet a Monday deadline for posting a $464 million bond to stave off collection on a New York civil judgment against him for business fraud. His lawyers told the court that Mr. Trump checked with dozens of surety companies but found it impossible to secure a bond, meaning New York Attorney General Letitia James might move to seize his properties or bank accounts.
SEE ALSO: Trump claims to have $500M in cash as he races to secure bond
It’s unclear if Mr. Trump could secure a waiver from the lockup provision or try to apply any profits from the merger toward a bond. Another uncertainty is whether the shares will hold their value.
Mr. Trump launched Truth Social in early 2022 after he was banned from Twitter and Facebook following the Jan. 6, 2021, riot at the U.S. Capitol. He’s been reinstated to those platforms but continues to promote Truth Social as his preferred website.
“On paper, Trump will be a few billion dollars richer after the merger. But there are legal challenges that could affect his percentage ownership,” said Michael Klausner, a professor at Stanford Law School who studies SPACs. “Also, the share price is driven by meme-stock or cult-stock dynamics, and Trump cannot sell his shares for six months. So, if the share price adjusts to market value before he can sell, that few billion dollars could shrink down to a much smaller level.”
Earlier Friday, Mr. Trump said he already had nearly $500 million in cash, though he wanted to use it for his campaign instead of devoting it to the New York judgment.
“Through hard work, talent, and luck, I currently have almost five hundred million dollars in cash, a substantial amount of which I intended to use in my campaign for president,” Mr. Trump wrote on Truth Social, using all caps for emphasis. “The often overturned political hack judge on the rigged and corrupt A.G. case, where I have done nothing wrong, knew this, wanted to take it away from me, and that’s where and why he came up with the shocking number.”
In a separate post, he said the judgment amounted to a “taking” that is performed in communist countries.
The posts seemed to undercut his attorneys, who said in formal filings that Mr. Trump was unable to secure bond money.
• This story is based in part on wire service reports.