Former President Donald Trump could become more than $3 billion richer after shareholders of Digital World Acquisition on Friday approved a merger with his Truth Social media site.
And he could use the money.
The deal was announced as the presumptive Republican presidential nominee faces a $454 million judgment in a New York fraud lawsuit.
But the ins and outs of the deal, based on share prices and a faddish ‘special acquisition purpose acquisition,’ mean he may not be able to lay his hands on as much as $3.5 billion for six months.
On Friday, he was busy on his site claiming he had the $454 million salted away for his campaign and accusing New York Attorney General Letitia James of election interference.
‘No trial, no jury, no crime, no victim, only a crooked judge and a corrupt, Trump-hating attorney general, who takes her orders directly from the White House,’ he posted in all capitals.
Former President Donald Trump could become more than $3 billion richer after shareholders of Digital World Acquisition on Friday approved a merger with his Truth Social media site
‘Election interference at a level seen before.’
Truth Social has been his main public mouthpiece since he set it up two years ago after being banned from other sites, including Twitter and Facebook.
Its value to him now may be as a source of cash, even though it has been losing tens of millions of dollars a year.
Enter Digital World, a publicly traded shell company set up specifically for the purpose of merging with a private company. After courting Trump Media and Technology Group for more than a year, it sealed the deal Friday,
That means Trump’s media group will take the shell company’s place and ‘DJT’ will soon appear on on the Nasdaq stock market, possibly as soon as Monday, all without the regulatory red tape of an ‘initial public offering.’
That marks an extraordinary payday for the former president. His 79 million shares have a stock price of more than $42, with a value on paper of $3.3 billion.
However, such ‘SPAC’ deals generally come with a lock-up provision that prevents insiders selling their shares immediately.
In the case of Digital World Acquisition and Trump Media and Technology Group, Trump must hold the share for six months.
That is a problem for Trump, who faces a Monday deadline to find a bond that would guarantee payment of a $454 million civil-fraud judgment against him. So far he has been unable to find a company that will back him, and risks having property or companies seized.
In some cases, the SPAC shell company can drop the lock-up provision, or the newly merged board could revise the terms after a deal is done. But board members would likely face questions about whether that was in the interests of other shareholders.
For now, it means Truth Social, which is believed to have about five million active users, remains more of a mouthpiece than a cash cow.
‘Truth Social is my voice and the real voice of America,’ Trump posted on Thursday evening.
And Friday he kept up his attacks on James, who brought the fraud case accusing him of inflating or reducing the value of his properties depending on whether he was using them to raise loans or assessing taxes.
He claimed she used a novel statute to go after him.
‘Under this statute, I get no jury and have no rights,’ he said.
‘All decisions and rights are given to, in this case, a corrupt, Trump hating judge, who came up with a crazy, out of thin air award, in order to damage me politically, and not allow me to use any of the large amount of cash I have built up over the years, through hard word, insight, instinct, and diligence, on my political campaign for president.’