DWAC Stock Experiences Surge of Over 35%
Court Lowers Bail from $454 Million to $175 Million
The corporation of former United States President Donald Trump, the Trump Media & Technology Group (TMTG), is scheduled to commence trading on the New York Stock Exchange on September 26th, local time.
TMTG, the parent entity of the social media platform Truth Social, disclosed on the 25th, through a securities filing submitted to US regulatory authorities, its intention to list its shares on the NASDAQ market under the ticker symbol “DJT,” derived from the initials of the former president.
TMTG announced that it had finalized the legal processes associated with its merger with Digital World Acquisition (DWAC), a particular purpose acquisition company. Concurrently, DWAC witnessed a notable surge in its stock price, exceeding 35%.
This merger and subsequent listing are anticipated to confer approximately $3.5 billion to former President Trump. DWAC’s stock is priced at $49.95 per share, with Trump holding an approximate stake of 78.8 million, equating to roughly 58%. With the prospect of Trump’s return to political prominence, DWAC’s stock has witnessed an increase of over 180% this year.
As a result, Trump’s overall assets have swelled to $6.4 billion, prompting speculation, as reported by Bloomberg, of his imminent inclusion in the ranks of the world’s top 500 billionaires on the Bloomberg Billionaires Index. Trump’s previous peak asset value was $3.1 billion, predominantly comprising real estate holdings.
Confronted with the substantial financial pressures posed by many lawsuits, Trump is expected to find respite through the public listing.
Furthermore, amidst a looming crisis of asset forfeiture, he evaded the direst consequences as the court significantly reduced his bail. The New York State Court of Appeals slashed Trump’s bail from $454 million to $175 million. Should he remit this amount within the stipulated 10-day timeframe, Trump would be relieved of the obligation to pay the fine imposed by the initial trial while the appeal process unfolds.
The existence of a “lock-up” provision restricting Trump from divesting his stock holdings for six months post-listing may pose challenges to his immediate financial solvency. There also looms the prospect of a downturn in stock valuation. Truth Social has faced scrutiny for its inferior quality vis-à-vis competing social networking platforms such as Facebook, X, and Instagram. Indeed, Truth Social’s offerings are replete with counterfeit remedies, merchandise themed around the former president, and advertisements promoting right-wing entities.
Revenue generation has remained modest, accruing only $3.7 million (49.5 billion won) during the January to September period of the preceding year. Analysts caution that absent a swift escalation in revenue streams, the sustainability of the company’s elevated valuation may prove tenuous. Moreover, the expiration of the lock-up provision could precipitate a rapid devaluation of stock holdings should Trump opt to divest a significant portion of his holdings.
Jim Cramer, a CNBC host and Goldman Sachs alumnus, has predicted, “Upon learning of Trump’s intentions to divest stock holdings, investors may become eager to follow suit, ultimately precipitating a market downturn.”
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