Former U.S. President Donald Trump edged closer on Friday to realizing a significant gain from his social media venture, as investors in a blank-check acquisition entity greenlit a merger currently valued at approximately $5.7 billion.
The agreement appraises Trump’s controlling interest in the entity housing his platform, Truth Social, at roughly $3.3 billion.
This windfall assumes heightened importance as Trump navigates the financial repercussions of multiple legal battles, notably a $454 million verdict in a civil fraud lawsuit in New York.
Shareholders of Digital World Acquisition Corp (DWAC), the special purpose acquisition company (SPAC) facilitating Trump Media & Technology Group’s market debut via a merger, overwhelmingly endorsed the arrangement on Friday.
While the next procedural step entails the completion of the deal next week, its trajectory is shrouded in uncertainty.
Former CEO Patrick Orlando of Digital World, along with former Trump associates Andy Litinsky and Wes Moss, have independently filed lawsuits seeking additional shares in recognition of their prior contributions to the agreement.
The resolution timeline for these lawsuits remains unclear. Moreover, even upon the deal’s potential finalization next week, Trump will be subject to restrictions barring the sale of any shares in the merged entity for six months, as well as limitations on leveraging them, as per prior agreements.
Additionally, the deal stands to inject a crucial $300 million cash infusion into Trump Media & Technology Group (TMTG), the parent company of Truth Social.
TMTG’s social media arm incurred an operational loss of $10.6 million in the first nine months of 2023, despite generating revenue of $3.4 million.
To sustain its operations, the company resorted to borrowing $40.7 million through convertible promissory notes, repayable in stock.
