'Can’t wait to buy shares': MAGA world abuzz as Truth Social goes public amid Trump's financial woes

MANHATTAN, NEW YORK: Digital World Acquisition Corp, a publicly traded shell company, recently obtained shareholder approval for a merger with Trump Media & Technology Group.

This deal will enable Trump's media business, whose flagship product is Truth Social, a social networking site, to begin trading on the Nasdaq stock market.

As a result, former President Donald Trump is set to become the majority shareholder, with nearly 79 million shares, according to Pittsburgh Post-Gazette.

Based on Digital World's closing stock price on Friday, which was $36.94, Trump's stake in the combined company could be worth almost $3 billion.

What did Digital World disclose about its merger with Trump Media & Technology Group?

Digital World approved its merger with Trump Media, however, the regulatory filings of Digital World listed multiple risks that investors may face, including those of the Truth Social owner once Trump Media becomes public.

One of the risks mentioned was that former President Donald Trump, as the controlling stockholder, would be entitled to vote in his own interest which may not always align with the interests of all shareholders.

Additionally, Digital World cited the high rate of failure for new social media platforms and Trump Media's expectation of losing money on its operations “for the foreseeable future.”

Trump Media had incurred a loss of $49 million in the first nine months of 2021, despite generating $3.4 million in revenue and paying $37.7 million in interest expenses.

The merger faced several legal challenges, along with a federal investigation leading up to Friday’s vote, having announced their merger plans back in October 2021.

Once a publicly traded shell company acquires a private company, the target company takes its place on a stock exchange upon approval by shareholders.

However, based on recent activity in Digital World's stock, shareholders of Trump Media could be in for a rough time.

Digital World's investors are primarily small-time investors who are either fans of the former president or trying to capitalize on the craze, rather than large institutional or professional investors.

These shareholders contributed to the stock more than doubling this year in anticipation of the merger. However, on Friday, the shares lost almost 14%.

The road ahead for Truth Social following the merger approval

Friday’s merger approval coincides with the ongoing legal challenges faced by the presumptive Republican presidential nominee, who is currently embroiled in a high-stakes fraud lawsuit.

Although the business deal promises significant financial gain for Donald Trump, immediate access to the funds is contingent on the company's board of directors revising a "lock-up" provision that restricts the sale of newly issued shares by insiders for a period of six months.

Trump Media has yet to disclose the user numbers associated with Truth Social. However, research firm Similarweb has estimated that the platform had approximately 5 million active mobile and web users in February.

While this figure pales in comparison to the user bases of TikTok and Facebook, which boast over 2 billion and 3 billion users, respectively, it is still higher than other "alt-tech" competitors, such as Parler, which has been offline for almost a year but is planning to make a comeback, or Gettr, which had just under 2 million visitors in February.

If Trump Media decides to go public, it will be obligated to disclose more information about its activities.

Private companies are accountable to their owners, whereas public companies are accountable to their shareholders, who own the company's stock.

Once it becomes a public company, Truth Social will be required to report its quarterly financial results, as well as other material news, to federal regulators.

In this regard, Truth Social will face some of the same challenges as other social media platforms like X, that have struggled to attract mainstream advertisers who wish to distance themselves from hate speech and other divisive content.

Truth Social was launched in February 2022, a year after former US President Donald Trump was banned from prominent social media platforms such as Facebook and Twitter, which is now known as X, after the January 6 riots at the US Capitol.

Although he has since been reinstated to both platforms, Trump still uses Truth Social to amplify his political message.

Internet reacts as Truth Social is set to go public after merger with shell company is approved

People on X shared their immediate reactions and opinions following the news that former President Donald Trump’s social media company was approved to go public, potentially generating billions for him.

One X user remarked: “Hahaha he’s about to make hundreds of millions again."

Another user said, "Can’t wait to buy shares".

Another user wrote, "I thought you said he was broke…"

One user quipped, "So, all you have to do is have a massive debt sheet to make billions? I'm doing something wrong."

Another X user remarked, "lol all going to go straight to paying his legal penalties".

Finally, this user tweeted, "Yeah, MySpace is coming back too".

This article contains remarks made on the Internet by individual people and organizations. MEAWW cannot confirm them independently and does not support claims or opinions being made online.