Digital World Acquisition Corp. shareholders have voted to approve a merger with Donald Trump’s social media company, potentially leading the former president to an eventual windfall of $3 billion or more. The deal includes merging with Trump Media & Technology Group, the private firm that owns the Truth Social app platform. This approval comes amidst Trump’s ongoing legal battles, including a $454 million civil fraud judgment that New York Attorney General Letitia James seeks to collect.
Following the shareholder vote, the share price of DWAC experienced a 12% decline initially but later recovered some of the loss. The newly combined company, Trump Media, could soon be publicly traded under the stock symbol DJT. The share price volatility of DWAC directly impacts the value of Trump’s shares in the merged company, with a significant portion of DWAC’s tradable shares being sold short.
Trump’s potential windfall of $3 billion or more relies heavily on the trading price of the merged company’s shares. However, there are restrictions in place that prevent Trump from immediately selling his shares. Trump will be required to wait at least six months before selling, and there is a possibility that the share lockup period could be lifted earlier by a board of directors that includes individuals closely connected to Trump, such as Donald Trump Jr. and former trade representative Robert Lighthizer.
Legal Challenges
The financial implications of the merger come at a crucial time for Trump, who is facing significant legal challenges and mounting legal fees. Trump has three separate civil cases with damage judgments totaling over half a billion dollars. Additionally, he is seeking a stay of the $454 million fraud judgment while he appeals the verdict. Trump’s legal team has stated that he lacks the necessary cash to offer as collateral for a bond to secure the judgment and prevent collection by Letitia James.
While the approval of the merger presents the potential for a substantial financial gain for Donald Trump, there are legal and financial challenges that could impact his ability to fully capitalize on this opportunity. The interplay between the stock market performance of the merged company, regulatory restrictions on share sales, and ongoing legal battles creates a complex landscape that will shape Trump’s financial future in the coming months.
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