The firm behind Donald Trump’s Truth Social went public on Tuesday at a price that values the minnow social network at close to $8bn.
Shares in Digital World Acquisition, the shell company with which Trump’s social media business has merged, have been surging since the turn of the year.
They launched a volatile rally as it combined with Trump Media & Technology on Tuesday, closing up 15% after their first day of trading.
The firm is trading under the ticker symbol “DJT”, using Trump’s initials.
Trump Media’s arrival on the market has netted the former president a paper fortune of some $4.6bn . After the deal closed on Monday, Bloomberg said that Trump had joined the ranks of the world’s 500 wealthiest people for the first time.
But trading in Trump Media was so volatile after Tuesday’s opening bell, it was briefly halted. At one point on Tuesday, shares in the group had soared by more than 50%.
Trump, who is currently unable to offload his stake, will need the stock to continue to trade at the levels to which it has surged in recent months if he is to raise billions of dollars from a sale.
“I LOVE TRUTH SOCIAL,” he wrote on the platform shortly after Trump Media landed on New York’s Nasdaq stock exchange. Investors finally backed a merger between Trump Media and Digital World last week, setting the stage for the deal to close.
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It comes as Trump, who is vying to regain the presidency from Joe Biden in November’s election, grapples with hefty legal costs. He is on the hook for $454m after a civil fraud case, although the former president was thrown a lifeline on Monday when a panel of appellate court judges provided him with 10 days to secure a far smaller $175m bond.
Trump Media has struggled since Truth Social’s lackluster launch, generating sales of only about $5m since 2021. But Digital World has increasingly been seen as a so-called meme stock, boosted by internet memes – posted, in its case, on platforms including Truth Social – urging retail investors to buy into it.
Special purpose acquisition companies, or Spacs, such as Digital World raise money from investors through initial public offerings, before typically searching for a company to take public.
Once a Spac finds and agrees terms with a target, it absorbs the business and draws it on to the stock market, enabling investors in both companies to take a slide. Should the Spac’s original investors not like the deal, however, they can withdraw their cash.
Devin Nunes, the former Republican congressman who now serves as CEO of Trump Media, said: “As a public company, we will passionately pursue our vision to build a movement to reclaim the internet from big tech censors.”
Source: US Politics - theguardian.com
