OAN’s Elizabeth Volberding
6:00 PM – Monday, February 19, 2024
The United States Securities and Exchange Commission (SEC) approved former President Donald Trump’s social media platform, Truth Social, to merge with a blank-check company called Digital World Acquisition Corporation.
After two years of delays due to a thorough investigation by regulators, the SEC has finally approved a contentious merger that will soon reportedly launch on Wall Street under Donald Trump’s Truth Social platform.
The Trump Media & Technology Group, the company that owns Truth Social, and Digital World Acquisition Corporation (DWAC), which is a Special Purpose Acquisition Company (SPAC) that intends to take the company public, has received approval from the SEC to merge.
Therefore, this may give Trump a substantial ownership position in the business. According to new SEC filings, Trump is expected to own about $79 million shares of the business.
As of Friday morning, DWAC shares were trading for slightly more than $49.50, making that stake worth approximately $4 billion.
It emphasized how some investors, many of whom are Trump supporters, are overlooking Truth Social’s losses and small user base as a result of Trump’s involvement. The stock market has increased the deal’s value by over three times since January as Trump has solidified his hold on the 2024 Republican nomination.
Depending on how much support the deal receives from investors, Trump’s ownership stake in the combined company will reportedly range from 58.1% to 69.4%.
Depending on how his presidential campaign plays out, Trump could even sell his interest in Truth Social and step away from its management, according to a regulatory filing on Wednesday from DWAC.
The SEC approved the filing, which included new details about the operations of Trump Media & Technology Group, the parent company of Truth Social. This allowed DWAC to organize a shareholder vote to approve and finalize the merger.
The shares of DWAC increased 16% to $50.49 during Thursday’s afternoon trading in New York.
Given the current stock price and the assumption that no shareholders of DWAC would exercise their right to redeem their shares, the combined company would be valued at approximately $10 billion, of which Trump would own 58.1%, or roughly $4 billion.
However, approval from the SEC has been a long journey.
In June 2022, DWAC stated that more documents and details regarding the proposed merger were being looked over by security regulators. Authorities were particularly interested in “communications regarding and due diligence of potential targets other than [Trump’s company].”
Trump essentially has unlimited authority at DWAC due to his agreement with the company. A prior filing highlighted that no personal or political action could be taken into consideration in terms of a breach of the agreement, even if it was “dishonest, illegal, immoral, or unethical.”
In addition, Trump will be able to choose the members of the board of directors and possibly obstruct actions that would typically need the consent of stockholders, such as the company’s acquisition.
Currently, Trump has 6.62 million followers on Truth Social.
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