Donald Trump's social media platform, Truth Social, has moved closer to a stock market listing, triggering a dramatic surge in its stock value.
While Donald Trump is a household name, Digital World Acquisition Corp (DWAC), associated with him, might not be as familiar to many. However, Trump's connection to the company, alongside his victories in the primary elections, has caused the stock price to skyrocket in 2024, marking a staggering 180 percent increase.
DWAC is a Special Purpose Acquisition Company (SPAC) established and listed on the stock exchange with the aim of acquiring other companies. Since 2021, the group has been attempting to merge with Trump Media, which owns the former president's own social media, 'Truth Social'.
The recent approval by the U.S. Securities and Exchange Commission (SEC) for the companies to merge has led to a drastic rise in stock price, propelling the company's value to an astonishing ten billion dollars. This is half of what Elon Musk's far more popular social media company X is reportedly worth, according to Reuters.
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Supporters Behind the Surge
Consequently, it is assumed that a portion of the investors are either loyal Trump supporters or speculators, as Truth Social has not been a profitable venture thus far.
The market value has more than tripled since January when Trump tightened his grip on the Republican nomination for president. Trump is expected to own between 58.1 percent and 69.4 percent of the merged company, depending on the degree of investor support for the deal.
However, Trump's ownership may be short-lived. If he becomes president again, he might choose to sell his stake in Truth Social and step down from management.
Drama Surrounding the Merger
The merger agreement has been dramatically delayed on several occasions. The U.S. Department of Justice has initiated investigations, the CEO has been fired, board members have been replaced, and there have been inaccuracies reported to the stock exchange. Additionally, three men have been charged with insider trading related to the merger, though they have pleaded not guilty.
Even though the SEC has green-lit the merger, obstacles still lie ahead. One such hurdle is the now-fired CEO Patrick Orlando, who played a crucial role in forming DWAC in its current state and controls a significant portion of the shares. According to management, he could delay the deal, seeking additional compensation.
Other Trump-related stocks, such as the online video platform Rumble and software company Phunware, have also seen significant increases recently.
