Trump-tied SPAC deal approved, setting up a potential windfall
Former President Donald Trump is set to get a big payday — on paper at least — after investors voted to approve a blank-check deal that would bring his nascent media startup public as soon as next week.
The approval, which was broadcast on an unsanctioned video stream by a Rumble user, clears a near-final hurdle for Trump Media & Technology
Group to go public in a deal with Digital World Acquisition Corp. after more than two years of snags as the company burned through its cash.
Representatives for
Digital World and Trump Media didn’t respond to requests for comment.
The merger could potentially hand Trump nearly $4 billion worth of shares, though they would be subject to lock-up agreements and performance requirements that may temporarily hinder his ability to monetize the stock and ease his present cash crunch.
Completing the merger would give Trump billions of dollars worth of stock based on his more than
58% stake in the company, and be a boon for Devin Nunes, a former California representative who left Congress to become CEO of Trump Media, and other insiders. Trump and other company insiders could earn millions in additional shares depending on the stock’s ability to perform, however there are a number of caveats to the windfall.
Trump and other stakeholders will have to wait months to cash out because members of Trump Media’s management team are subject to a lock-up period of roughly six months during which they cannot sell or transfer shares, unless the company files to expedite that timing.
Despite those restrictions, the windfall may come at a critical time for Trump who earlier this month became the presumptive Republican presidential nominee. He’s paying millions of dollars a month to fund his ongoing legal troubles, which include four criminal indictments.
Trump posted Friday on Truth Social, the platform operated by Trump Media, that he has almost $500 million in cash on hand. That’s a hefty sum, yet it would still fall short of covering the appeal bond due in three days in New York state’s civil fraud suit. And Trump’s fundraising efforts trail those of his rival President Joe Biden by a wide margin, as many traditional GOP donors are hesitant to publicly back Trump’s reelection bid.
DWAC shares fell 14% in the biggest drop since January, erasing a 12% gain on Friday, after the approval went through as expected. Warrants tied to the SPAC dropped 6.3% to $18.37.