In a significant move for the social media landscape, former US President Donald Trump's media venture has cleared a major hurdle. Trump Media & Technology Group (TMTG), the parent company of the Truth Social platform, has successfully completed its merger with a special purpose acquisition company (SPAC) called Digital World Acquisition Corp. (DWAC).
The Long-Awaited Merger Finally Concludes
This merger marks the culmination of a process that began over two years ago, in October 2021. The deal faced numerous delays, including regulatory investigations by the Securities and Exchange Commission (SEC) and legal challenges. Shareholders of Digital World Acquisition Corp. finally voted to approve the merger, paving the way for the combined entity to begin trading on the Nasdaq stock exchange under the ticker symbol "DJT," which are Trump's initials.
The newly merged company could attain a valuation approaching $6 billion, based on the current trading price of DWAC stock. This substantial figure highlights the significant investor interest surrounding the venture, which is closely tied to the political fortunes of Donald Trump, the likely Republican nominee for the 2024 US presidential election.
Financial Windfall and Future Plans for Trump Media
The completion of this SPAC merger injects much-needed capital into Trump Media & Technology Group. Reports indicate the deal provides over $300 million in immediate financing to the company. This financial boost is critical for TMTG as it seeks to expand the reach and features of Truth Social, which was launched in February 2022 as an alternative to mainstream platforms like Twitter (now X) and Facebook.
Truth Social was created following Trump's ban from several major social media sites after the January 6 Capitol riots. It has positioned itself as a platform championing free speech and has become a hub for his supporters. Donald Trump himself holds a dominant stake of nearly 79 million shares in the newly public company, a holding worth billions at the current valuation. However, he is subject to a lock-up period that prevents him from immediately selling or transferring his shares for at least six months.
Market Reaction and Broader Implications
The market has shown volatile but keen interest in the deal. DWAC's stock price has experienced significant swings in the lead-up to the shareholder vote, reflecting both optimism and the inherent risks of a SPAC merger with a company that has reported substantial financial losses. According to filings, TMTG reported a net loss of $49 million in the first nine months of 2023, with modest revenues of just $3.4 million.
This merger is more than just a business transaction; it intertwines media, finance, and politics. The success of Truth Social as a publicly traded entity is now directly linked to Trump's political brand and activism. The substantial valuation sets the stage for a unique experiment: whether a social media platform built around a single political figure can achieve lasting financial sustainability and competitive scale in a crowded market.
The merger's completion also resolves a long-running saga for Digital World Acquisition Corp., which faced the threat of liquidation if it failed to complete a deal by its deadline. With the merger done, the focus now shifts to the performance of "DJT" on the Nasdaq and the operational execution of Trump Media's team to grow its user base and revenue streams beyond its core political audience.
