Donald Trump’s media company, behind the social media app Truth Social, is gearing up for a stock market listing through a merger with a special purpose acquisition company (SPAC), Digital World Acquisition Corp (DWAC). The deal, greenlit by the U.S. Securities and Exchange Commission (SEC), places the value of Trump’s venture at an impressive $10 billion. This figure, though substantial, is about half of what Elon Musk’s social media giant X is worth, highlighting the challenges and competitive landscape Trump’s company faces.
Despite experiencing several setbacks over the past two years in its efforts to list on the stock market, investor enthusiasm, particularly from Trump supporters, has surged. This surge is tied closely to Trump’s potential 2024 presidential run, with the merger’s market value tripling since January as Trump appears to strengthen his position for the Republican nomination.
Trump, who may own up to 69.4% of the merged entity, has indicated through DWAC that his involvement with Truth Social could change depending on the outcome of his presidential campaign. This includes possibly divesting his stake and stepping back from management roles.
The merger journey hasn’t been smooth, marked by scrutiny from the Department of Justice, leadership changes within DWAC, and an $18 million settlement with the SEC over disclosure inaccuracies. Despite these hurdles, the recent SEC approval allows DWAC to proceed with a shareholder vote to finalize the merger.
Financially, Trump Media & Technology Group (TMTG), Truth Social’s parent company, has navigated through significant expenditures and operational losses. From its inception in February 2021 to September 2023, TMTG has spent $38.5 million, supported by borrowings, and is considering issuing up to $65 million in convertible notes to stave off a cash crunch. Yet, it has shown growth, with revenues climbing to $3.4 million in the first nine months of 2023 from a modest $237,000 in the previous year.
The proposed board for the combined company reads like a who’s who of Trump associates, including former National Security Council adviser Kash Patel, and Trump’s son, Don Jr., with former U.S. lawmaker Devin Nunes slated as CEO.
TMTG’s inception was largely a response to Trump’s ban from major platforms following the January 6 Capitol attack. Despite having a significantly smaller follower base on Truth Social compared to his previous presence on X, Trump’s new platform has registered 8.9 million sign-ups, signaling a dedicated, if smaller, user base.
The landscape for social media and political communication continues to evolve, with Trump’s Truth Social positioned as a key player in the mix, especially as Trump leverages it as his primary tool for reaching supporters amidst his ongoing political endeavors.
