Trump’ Truth Social closes in on Wall Street listing
Published: 05:56 16 Feb 2024 EST
Donald Trump’s social media and technology company, Truth Social, has been cleared to merge with a special purpose acquisition company, valuing the group at around US$10 billion.
The U.S. Securities and Exchange Commission (SEC) approved the merger after two years of Trump’s company attempting to receive a stock market listing.
A US$10 billion valuation is believed to be around half that of its direct rival X/Twitter.
Some believe the former US president’s attachment to the site has been a key aspect of the valuation, and investors have been ignoring the site’s losses and limited user base.
As Trump closes in on becoming the Republican candidate for the upcoming election, Truth Social’s valuation has ticked higher and is believed to have increased threefold since January.
Trump is expected to retain a stake between 58.1% and 69.4%, depending on the merger's final investment terms.
However, Trump has indicated the possibility of divesting his stake and ending his management role in Truth Social, depending on the trajectory of his potential presidential campaign.
Shareholders of Digital World Acquisition Corp, the company merging with Truth Social, will now vote on whether to go ahead with the deal.
Since announcing the deal in October 2021, Digital World’s path to the merger has been fraught with regulatory scrutiny, boardroom shakeups and an ousted chief executive.
Yet, the announcement saw Digital World's stock rally 16% in trading on Thursday.
At this valuation, Trump’s company would receive a valuation of around US$10 billion, leaving the former president a stake worth about US$4 billion.
