In a significant development, investors have approved a $5.7 billion merger for former U.S. President Donald Trump's social media platform, Truth Social. This approval brings Trump's stake in the company to an estimated $3.3 billion, offering a crucial financial boost amid ongoing legal challenges.
The merger, facilitated by Digital World Acquisition Corp, a special purpose acquisition company (SPAC), will also inject $300 million in cash into Trump Media & Technology Group (TMTG), the parent company of Truth Social. Despite reporting a loss of $10.6 million on revenues of $3.4 million in the first nine months of 2023, TMTG has managed its finances by borrowing $40.7 million through convertible promissory notes.
Following the merger, the combined company could be valued up to $8.6 billion on a fully diluted basis, considering warrants and earnout shares. Digital World's stock has experienced a surge, nearly quadrupling since its partnership with TMTG was announced in 2021, although it saw a 10% drop post-deal approval.
Truth Social boasts 8.9 million sign-ups to date, a modest figure compared to X, formerly known as Twitter, which has over half a billion monthly users. Donald Trump, who is preparing for another presidential run, will hold between 58.1% and 69.4% ownership of the merged entity, contingent on investor support.
TMTG was initially created with the assistance of Litinsky and Moss, former contestants from Trump's reality TV show \"The Apprentice.\" The platform serves as a way for Trump to maintain a direct line of communication with his supporters after being removed from major social media sites like Facebook, Twitter (now X), and YouTube following the January 6, 2021 Capitol attack.
Reference(s):
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