Have former President Donald Trump’s financial burdens been resolved? The markets, the political arena, and his legal adversaries paid attention to Wall Street this last week. It was not to see if the Dow Jones Industrial Average would close above 40,000 or if cocoa prices would reach $9,000 per metric ton. Instead, many were waiting to determine the result of a shareholder vote that would see if blank-check firm Digital World Acquisition Corp. (DWAC) would officially merge with Trump Media & Technology Group (TMTG), the owner of social media outlet Truth Social - extending a big dollar lifeline to 45 just as New York Attorney General Letitia James seeks to start her collection rounds.
Donald Trump Doubles Net Worth
In October 2021, DWAC proposed buying TMTG. However, the corporate crusade took three years due to various legal challenges by the Securities and Exchange Commission (SEC) and the Department of Justice. It was not until a Delaware court ruled earlier this month that DWAC could move forward with the scheduled vote and complete the merger.
The result? Investors voted to approve the DWAC-TMTG union, and the newly formed company under the ticker DJT - will begin trading on the Nasdaq Composite Index in the coming days at a roughly $5 billion market value. The deal would offer Trump about $3.5 billion on paper, controlling about 60% of the combined entity with nearly 79 million shares.
DWAC shares were on a roller coaster ride to finish the trading week, seesawing between positive and negative territory. The stock eventually settled down nearly 14% to below $37.
While this might appear to be a critical victory on the surface, the potential windfall may not be immediately available to Trump because of the lock-up provision. This is a standard component in the financial markets as it prevents insiders and early investors from selling newly issued shares to turn a quick profit. The lock-up period is six months. Terms of the merger have yet to be made available to the public, but there could be a couple of workarounds for the presumptive Republican nominee.
(Photo by Joe Raedle/Getty Images)
The first is that he could receive a waiver from DWAC. The second is that the new board of directors – poised to consist of close Trump allies, like former Rep. Devin Nunes, Donald Trump Jr., and a couple of previous administration officials – could adjust the terms and grant him access to the funding. A possible concern for Trump is that the stock’s value could tumble by the time he can touch the massive amount of funding later this year. Comparable to other tech startups, Truth Social has endured various financial issues, including the inability to generate a profit, lackluster revenues, and enormous interest expenses. Additionally, according to SEC filings from DWAC, Truth Social anticipates experiencing losses “for the foreseeable future.”
Truth Social has millions of users, and Nunes thinks the social media platform is a safe harbor for free speech. He told Fox News Digital: “We set out to create a safe haven for free speech on the internet, which is needed now more than ever. And we believe the merger will allow us to expand this movement even further. If you want to sound off outside the control of Big Tech censors and suppressors, Truth Social is the place for you."
DJT’s success on Wall Street will ultimately depend on the Trump brand and press attention.
What About New York?
Before shareholders were scheduled to vote at 10 a.m., the former president took to Truth Social to declare that he had the $454 million in his New York fraud lawsuit. It was unclear where the funding originated, but Trump later confirmed to Fox News that he did not intend to pay the bond. “I’ll fight this all the way up to the US Supreme Court, if necessary,” Trump told the network. “They can’t take away your property before you’ve had a chance to appeal.”
These remarks come after The Wall Street Journal reported that AG Letitia James plans to seize his assets beginning March 25. Reports suggest she could initially target 40 Wall Street, Trump's largest real estate asset in his massive portfolio. Additionally, legal experts warn that James could sell his assets, garnish anyone who owes him money, lien his residential and commercial properties, and drain his bank accounts and investment vehicles. The other option for Trump is to ignite a fire sale of his assets, selling them for a fraction of their worth.
Whether this would include Truth Social or not remains to be seen.
Teflon Don
Whenever the mainstream media parrots that the walls are closing in on Trump or the establishment appears to have him in the corner, the 2024 presidential candidate taps into one of his nine lives. The TMTG-Truth Social-DWAC arrangement was another life raft for Trump. There is a reason some call him Teflon Don; Trump is perpetually resistant to legal and political scandals that would disintegrate anyone else. However, polytetrafluoroethylene, a synthetic polymer of carbon and fluorine, will eventually deteriorate once even a minor scratch or scrape breaks through. As the avalanche of trials and tribulations submerge the man, will Teflon Don's empire fall victim to the death of a thousand cuts?
