Truth Social on verge of stock market approval, potentially netting Trump billions
Vote to take place on whether former President Trump’s media company can merge with Digital World Acquisition Corp, a publicly traded shell company
Truth Social CEO and former Congressman Devin Nunes shuts down speculation that former President Donald Trump will no longer be exclusively on the platform.
Former President Trump will find out Friday if his social media platform Truth Social will be green-lighted to be traded on the Nasdaq stock market.
A vote will take place on whether Trump’s media company, Trump Media & Technology Group, which operates his Truth Social site, can merge with Digital World Acquisition Corp, a publicly traded shell company.
If the deal is approved, Trump Media & Technology Group could soon start trading on the stock market in Digital World’s place, potentially netting the former president billions of dollars.
Trump launched the social media platform in February 2022, a year after he was kicked off platforms such as X, Facebook and Instagram, following the riot at the U.S. Capitol. Following the lifting of those bans, he has slowly returned to using them – although he has only once used X, posting a police mugshot image of himself following his arrest on racketeering and related charges.
TRUMP'S TRUTH SOCIAL MEDIA DEAL CLEARS SEC HURDLE WORTH MILLIONS
Former President Trump's Truth Social is set to be approved to enter the stock market later today, potentially netting the former president billions. (James Devaney/GC Images | App store)
The vast majority of his social media activity over the last two years has been on Truth Social.
"TRUTH SOCIAL IS MY VOICE, AND THE REAL VOICE OF AMERICA!!! MAGA2024!!!" Trump posted to the platform Thursday ahead of the vote.
Should the merger go through, Trump would hold more than 78 million shares.
Multiply that by Digital World’s current stock price of more $42, and the total value of Trump’s stake could surpass $3 billion, The Associated Press reports.
The Truth social network logo is seen displayed in this picture illustration taken Feb. 21, 2022. (REUTERS/Dado Ruvic/Illustration / Reuters Photos)
TRUMP'S SOCIAL MEDIA APP FACING FINANCIAL FALLOUT
Trump, who would own between 58% and 69% of the company, and other investors could earn tens of millions more shares per a provision, known as an "earnout," tied to the stock’s performance, according to a filing, The Washington Post previously reported.
The merger could face resistance from Trump Media’s co-founders, Andy Litinsky and Wes Moss, whose investment company, United Atlantic Ventures, has threatened to block the move.
That company sent letters to Digital World claiming its initial agreement with Trump from 2021 was still in effect and granted them the rights to appoint two directors to the board and to receive a $1 million reimbursement claim, a filing said.
Digital World has also disclosed that former CEO Patrick Orlando may hold up the deal because he wants to receive additional compensation, Reuters reported.
Truth Social has struggled since its launch, losing $31.6 million from its launch in early 2022 to mid-2023, according to the filing reported by Reuters.
In 2022, Truth Social posted a profit of $50.5 million, with net sales of $1.4 million. It lost $23 million in the first half of 2023 with net sales of $2.3 million.
Elon Musk reinstated former President Trump to X following a vote. (REUTERS/Gonzalo Fuentes / Reuters Photos)
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Trump has 6.7 million followers on Truth Social, compared to the more than 87.4 million followers he has on X.
The Associated Press, citing research firm Similarweb, estimates that Truth Social had roughly 5 million active mobile and web users in February. Trump Media has not disclosed its user numbers. Facebook had 3 billion active users, TikTok has more than 2 billion, while Gettr had less than 2 million visitors in February, the publication reports.
X has 528.3 million monetizable monthly active users, according to searchlogistics.com.