OAN’s Brooke Mallory
12:12 PM – Friday, March 22, 2024
On Friday, Digital World Acquisition Corp. (DWAC) shareholders authorized a merger with former President Trump’s social media website, setting the stage for Truth Social to go public on the stock market and potentially bringing in $3.5 billion for Trump.
Regulators approved the long-awaited merger between the Trump Media & Technology Group and the blank check company last month, according to the Securities and Exchange Commission (SEC).
With his nearly 79 million shares of the combined company, Trump stands to profit around $3.5 billion from the deal.
“The stock has whipsawed in value throughout Friday after opening at roughly $44 per share, rising as high as $46.70 and falling as low as $38.12 before settling near $41 shortly before noon,” The Hill reported.
The possible windfall coincides with the ex-president’s difficulties in getting a $464 million bond in his civil fraud lawsuit in New York. Trump’s attorneys acknowledged earlier this week that it was “impossible” to obtain the entire appeal bond.
Trump may face asset seizures if he is unable to obtain the $500 million bond by Monday. With the filing of judgments in Westchester County, the attorney general’s office of New York has initiated the initial steps toward taking possession of Trump’s Seven Springs golf facility and private estate.
In order to reclaim the assets, the first step is to enter a judgment in the counties where Trump owns the properties.
A ruling has already been made in New York City, the location of the former president’s well-known 40 Wall Street and Trump Tower properties, as well as the site of Trump’s civil fraud trial.
However, a clause prohibiting insiders from selling new shares for six months could also prevent Trump from having rapid access to the funds, according to detractors of the former president.
In June of last year, two individuals, including a former board member of DWAC, were accused of engaging in insider trading after purportedly profiting $22 million by purchasing company stock prior to the merger announcement. In July last year, the SEC penalized the business $18 million for allegedly lying to the agency and investors about negotiations that DWAC’s future CEO and board chair had with TMTG before going public.
A possible risk mentioned by DWAC in its regulatory filings prior to Friday’s shareholder vote was its prior run-ins with the SEC.
DWAC advised Trump that his interests might not always coincide with those of the other stockholders and that he would have the authority to decide on topics put to the shareholders for approval because he will own roughly 60% of the shares in the new business.
Former business executives, such as TMTG co-founders Andy Litinsky and Wes Moss, as well as former DWAC chair and CEO Patrick Orlando, are also suing the merger in a number of cases.
According to The Washington Post, Orlando sued DWAC to demand larger compensation from the merger, while Litinsky and Moss accused TMTG of trying to reduce their ownership position in the business. To compel the former chairman to support the agreement, DWAC filed a lawsuit against him earlier this week.
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