Donald Trump is facing a hefty fine of $464 million for fraud, and he may turn to the stock market for help. His company, Trump Media, which operates the social media platform Truth Social, is set to go public after a majority of Digital World Acquisition Corp shareholders approved the acquisition. If the merger goes through, Mr. Trump will hold at least 58% ownership in the new company, estimated to be worth $3 billion at current share prices.
Despite concerns raised by auditors about the viability of Trump Media and unresolved legal issues, including fraud charges from the merger process, individual investors, many of whom are Trump supporters, remain optimistic about the deal. The new company, to be renamed Trump Media & Technology Group, could start trading on the Nasdaq as soon as next week under the ticker DJT.
While this merger may not immediately solve Trump’s financial problems, such as his fraud penalty, he may seek a loan against the value of his shares. However, banks may be cautious about lending him the full amount due to the company’s uncertain future prospects. Despite the risks, supporters like Chad Nedohin believe that investing in the company could help Trump in his legal battles and save the country.
Analysts caution that shareholders of Digital World face significant risks, as the company’s financial performance does not justify its current valuation. Truth Social, Trump Media’s flagship platform, has only around 8.9 million sign-ups and limited revenue, making its future profitability uncertain. The company’s stock price is heavily influenced by speculation and could face a sharp decline in the future.
Indeed, the fate of Trump Media as a meme stock remains uncertain, with experts predicting a potential collapse in the coming years. Still, individual investors continue to show interest in the company, especially after Trump’s involvement and recent political victories. Despite these challenges, Donald Trump stands to benefit the most from the merger, potentially reaping significant financial gains from investors.