Trump to return to stock market with upcoming media merger

Former President Donald Trump is making a return to the stock market as shareholders of Digital World Acquisition Corp., a publicly traded shell company, have approved a merger deal with his media business. The merger will result in Trump Media & Technology Group, the owner of the social networking site Truth Social, trading on the Nasdaq stock market. Trump stands to potentially benefit significantly from the deal, with his ownership stake of 79 million shares estimated to be worth over $3 billion.

However, a “lock-up” provision will prevent him from immediately cashing out the windfall. This move comes during a significant legal battle for Trump, who is facing a $454 million judgment in a fraud lawsuit. Trump’s previous 1995 venture into the stock market with Trump Hotels and Casino Resorts ended in bankruptcy by 2004, raising concerns among investors about the risks associated with his latest endeavor.

Digital World’s regulatory filings have highlighted various risks for investors, including Trump’s control as a majority shareholder and the challenges facing Truth Social in a competitive social media landscape. After the approval was announced and disclosed on Thursday, Digital World’s closing stock price fell 6%.

Despite these challenges, Truth Social, launched in February 2022, has garnered attention as a platform for Trump’s message, although its user numbers remain lower compared to major social media platforms like TikTok and Facebook. Software development and data aggregation company, Simarlarweb, estimated Truth Social had roughly 5 million active mobile and web users in February.