Merger Raises Trump Media Valuation to Over $5 Billion

Shareholders have given the green light to a merger between Donald Trump's media company and Digital World Acquisition Corp., marking a pivotal step towards taking the former president's company public.

by Faruk Imamovic
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Merger Raises Trump Media Valuation to Over $5 Billion
© Getty Images/Michael M. Santiago

In a significant financial development reported by The New York Times, shareholders have given the green light to a merger between Donald Trump's media company and Digital World Acquisition Corp., marking a pivotal step towards taking the former president's company public.

The merger is expected to significantly bolster Trump Media, the parent company of Truth Social, by injecting over $300 million into its coffers. This infusion of funds is seen as critical for the platform's continued operation, especially given its previously precarious cash position.

A Glimpse into the Financial Dynamics

At the heart of this merger is not just a financial lifeline for Trump Media but also a considerable enhancement of its market valuation, now pegged at over $5 billion. This revaluation is poised to elevate Trump's personal stake in the company to an estimated worth of more than $3 billion.

However, the timing of this financial windfall intersects with Trump's pressing obligation to settle a $454 million judgment in a New York fraud case by Monday. Despite the merger's potential, Trump faces a six-month restriction on liquidating any shares or leveraging them for loans, as reported by The Times.

Although there's speculation about the possibility of the post-merger company's board—comprising Trump allies and former administration officials—granting a waiver, the constraints on selling his stake remain stringent.

Politico highlights that any sale by Trump is limited to a mere 1% of outstanding shares per quarter, underlining the challenges he faces in mobilizing these assets swiftly. Critics and analysts have voiced skepticism about the merger's valuation, branding Trump Media as a 'meme stock' whose $6 billion valuation starkly contrasts with its financial realities.

With a loss of $49 million in the first nine months of the previous year and modest revenues, concerns about the company's financial sustainability and market appeal loom large. The company's future, much like its valuation, hinges on its association with Trump's brand—a factor that could either bolster its fortunes or, as some fear, precipitate a decline if Trump attempts to liquidate a significant portion of his holdings.

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