Media merger wins investor OK, giving Trump potential lift

Shareholders voted Friday to take former president Donald Trump’s media company public, a long-delayed move that will open the owner of Truth Social to stock-market investors and grant Trump a stake worth billions of dollars he could use to pay down his legal debts.

The vote Friday by investors in Digital World Acquisition authorized the special purpose acquisition company, or SPAC, to merge with Trump Media & Technology Group as part of a process that will avoid a more traditional public offering.

Trump will own about 60 percent of the company, which at Digital World’s current share price would be worth about $3.3 billion. He and other investors could earn tens of millions more shares through an “earnout” provision tied to the stock’s performance, Digital World said in an SEC filing.

The merger will net Trump Media $300 million that Digital World initially raised from investors. Trump’s allies and company executives will also be granted bundles of shares in the new company that could be worth millions of dollars. But trading on the stock market will also open the company to more public scrutiny, and any drops in share prices would affect the value of those stakes.

Critics have said Trump Media is a “meme stock” with a more than $6 billion valuation they say is out of sync with its financial outlook. Trump Media lost $49 million in the first nine months of last year and brought in $3.4 million in revenue, Digital World said in an SEC filing.

Digital World’s share price slid roughly 5 percent on the news, to about $40.

A lockup provision in the merger agreement will also prevent Trump and other major investors from selling their shares for six months unless he is granted a waiver by the postmerger company’s board.

That could limit Trump’s ability to use the windfall to help pay off the hundreds of millions of dollars he owes in legal judgments. Trump does not have the cash to secure a bond that would delay enforcement of the $464 million judgment in a New York fraud case, his lawyers said. If he does not post a bond by Monday, the state’s attorney general could move to seize his bank accounts, real estate, and other assets.

Any lockup change or waiver will be decided by the postmerger company’s board, which will be stocked with Trump allies, an SEC filing shows. The board’s nominees include Trump’s oldest son, Donald Trump Jr.; Trump’s former trade representative, Robert E. Lighthizer; Linda McMahon, who headed the Small Business Administration under Trump; and Kash Patel, who served on Trump’s National Security Council.

Devin Nunes, the former Republican representative, will stay on as Trump Media’s chief executive.

The post-merger company, which will be called Trump Media, could begin trading on the Nasdaq stock exchange as soon as Monday under the ticker symbol of Trump’s initials, DJT.