Former President Donald Trump is facing a hefty $464 million fraud fine, but could the stock market come to his rescue? Trump Media, the company behind the social media platform Truth Social, is set to go public after a majority of shareholders of Digital World Acquisition Corp voted to acquire it.
Despite warnings from auditors about the potential failure of the business, Trump is poised to have a stake of at least 58% in the merged company, valued at roughly $3 billion. The approval of the deal caused shares in Digital World to rise before sliding back down.
Many of the backers of Digital World are individual investors, with some being loyal supporters of Trump. The company will be renamed Trump Media & Technology Group and could start trading on the Nasdaq stock exchange soon.
While the deal may not immediately resolve Trump’s financial issues, such as his fraud penalty, supporters are hopeful that their backing will help him. Analysts warn that the risk of losing money on the investment is significant, as the share prices are down from their highs in 2021.
Despite the potential risks, the merger will provide Trump Media with over $200 million in cash for growth and expansion. Truth Social, which launched in 2022 as an alternative to major social media platforms, remains small compared to its competitors.
Analysts describe Digital World as a “meme stock” with a share price divorced from the company’s fundamentals. The future of Trump Media is uncertain, with some predicting its eventual collapse. However, for now, Trump appears to be the top beneficiary of the deal, standing to gain significantly from the merger.
