Shareholders of Digital World Acquisition Corp., the so-called blank check company that has a deal to merge with former President Donald Trump's media company, are scheduled to vote on the deal on Friday. Trump is expected to record a financial windfall, but it's unclear how quickly he will access any of the proceeds to deal with his legal bills.
Trump owns about 60% of Trump Media and Technology Group, the company that runs the social networking site Truth Social, a competitor to Elon Musk's former Twitter site. Shares of Digital World Acquisition rose nearly 4% Thursday afternoon in choppy trading ahead of a vote on the deal. Digital World stock is up nearly 160% this year.
according to Regulatory filingsIf the deal is approved, Trump will control 78.75 million shares in the new combined company. It will trade under the ticker symbol DJT on the Nasdaq. Based on Digital World's current price of about $45, the former president's stake would be worth more than $3.5 billion.
Technically, Trump will not be allowed to profit from the stock sale until a six-month lock-up period expires. Most initial public offerings and SPAC deals include such rules to prevent insiders from profiting from a rapid stock rise.
But Trump, the presumptive GOP nominee for president, could seek to get around that by seeking a concession from shareholders to sell shares sooner. He can also borrow money using his stake as collateral.
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Selling 60% of the company, or any other significant portion, could be devastating to other shareholders. Representatives for Trump and Trump Media & Technology did not immediately respond to requests for comment.
Trump faces an urgent need for liquidity, given the court ruling requiring him to pay $464 million as part of a civil fraud judgment. The former president appealed this decision.
“No one has ever heard of anything like this before. I will have to mortgage or sell significant assets, perhaps at very low prices, and if I win the appeal, they will disappear.” he said in a Tuesday post on Truth Social. “Does this make sense? Witch hunting. Election interference!”
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