Trump Is in Line for a $3.5 Billion Windfall From Stake in Truth Social

[question everything]

Donald Trump’s supporters are pushing to hand him a nearly $3.5 billion windfall by driving up the value of his also-ran social-media platform, which is on the cusp of getting approval to list on the stock market.

Trump’s winning lottery ticket would come from Truth Social, the social-media platform he launched in 2021. After a twisted path that included tens of millions of dollars in losses and insider-trading convictions, the shell company taking Truth Social public became the market’s latest meme stock. Trump’s supporters banded together to push up the stock, valuing Truth Social to a staggering $6 billion. Truth Social could go public as soon as next week, but the deal still needs to be approved by shareholders. Even if that happens, Trump must hold his shares for six months.

(snip)

The deal is as stunning as it is unusual. Truth Social was created by Trump after he was bounced off other social-media platforms. The platform has failed to catch on with users and its financial performance has been dismal. The platform has logged about $5 million in sales since its launch three years ago and burned through the roughly $40 million it raised from convertible notes.

That hasn’t mattered as long as shares of Digital World Acquisition, the SPAC aiming to merge with Truth Social, are soaring. The stock rose 18% to nearly $43 Wednesday, implying a valuation of roughly $6 billion for Truth Social. Trump would own about 60% of the public company.

More..

https://www.wsj.com/finance/stocks/trump-is-in-line-for-a-3-5-billion-windfall-from-his-stake-in-truth-social-eae58c9d?st=p8gyfmyqo7qmvu9&reflink=desktopwebshare_permalink

(free)

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Whiny should be happy that his wishes for a stock market crash under Biden has not materialized.

[TSExile]

1. Has ANYONE in the history of the world been as lucky as TSF???

Nothing bad ever happens to him. Even when he loses, he wins. I can't even!!!

[TheBlackAdder]

14. I guess he could take those stocks and go to JG Wentworth and get a high-interest loan or something.

[tinrobot]

2. The business doesn't merit that level of investment. So why are they buying up shares?

I'll give you one guess.

[Think. Again.]

7. Hey DOJ (and homeland security), follow that money trail.

[TwilightZone]

9. Speculation

That probably wasn't what you had in mind, but that's what this is. Speculation is rampant in the market right now, in some cases to a ludicrous degree.

NVidia Corp, which has roughly $40b in assets, has been flirting with a market cap of $2 trillion.

[Dirty Socialist]

11. Didn't wild speculation cause the Great Depression?

Or was one of the causes?

[ITAL]

12. One cause of several

[Gore1FL]

3. I wonder how much wind will be left when he can actually move the money from it.

It's not like Truth Social is an advertising-revenue-generating behemoth.

[Silent Type]

4. Thanks for the link. The WSJ indicates some skepticism in what trump might get.

“The outcome of the vote and Trump’s ultimate payoff are still uncertain. . . . . .

“Trump would have to hold the shares for six months before selling, meaning he can’t touch the cash until the end of September. He could request a waiver to sell his stake or borrow against it, regulatory filings show. It is unclear whether insurers that would back the bond would accept these shares.

“Over the six months, Truth Social could continue to struggle. Though the company could get several hundred million dollars from the deal, it has failed to become a competitor to bigger platforms.

“The expectation that Trump would dump his shares as soon as possible could also tank the stock price.”

[brooklynite]

5. There is no "windfall"

His stock has paper value until its sold, and his sale will invoke capital gains tax.

[RANDYWILDMAN]

6. Nope

unless one of his dictator buddies is helping fund his next loser company


Jared and Ivanka took their money and ran away

[Think. Again.]

8. Yep, one of his dictator buddies IS probably helping fund this sudden value increase.

[Nevilledog]

10. Not happening anytime soon.

He's being sued by other investors and even if the merger eventually happens, Trump can't sell for 6 months.

https://www.politico.com/news/2024/03/01/legal-hurdles-swell-for-trumps-truth-social-deal-in-11th-hour-00144398#:~:text=In%20one%20case%2C%20filed%20in,percent%20stake%20in%20the%20business.

[LetMyPeopleVote]

13. Digital World (DWAC): Is it safe to buy Trump SPAC stock?

This is a meme stock where the price is not based on anything financial results or reality.

Link to tweet

https://invezz.com/news/2024/03/20/digital-world-dwac-is-it-safe-to-buy-trump-spac-stock/

DWAC has made several headlines in the past few months. Three weeks ago, co-founders of the SPAC sued Trump Media, alleging a stock grab. This happened a few weeks after the SEC allowed the two companies to go through a merger. Another important report was that Trump had approached Elon Musk to buy Truth Social.

DWAC stock has done well this year as Donald Trump has become the Republican nominee for US president. The expectation is that the election hype will lead to more users to the platform since it is now his main mouthpiece.

Also, there are hopes that a Trump victory in the election will see more advertisers flocking to the platform. For example, it has been widely reported that many foreign governments and lobbyists frequented Trump’s Washington hotel during his term.

Fundamentally, however, Trump Media is a significantly weak social media company. First, the biggest risk is that it has struggled to add users, especially now that X (Twitter) has eased its content moderation policies. ....

Further, and most importantly, Truth Social will struggle to attract the biggest advertisers like Apple, Unilever, Colgate-Palmolive, and General Motors. Most of these firms have generally avoided advertising in right-wing platforms, including Fox.

This means that Truth Social will focus on smaller advertisers like My Pillow that have a limited marketing budget. Also, it will take a longer period for the company to break even.

Meanwhile, Trump is on the hook for millions of dollars. This week, he said that he could not post the bond to a recent New York filing. This means that Trump will be one of the top sellers of the stock when the lock-up period arrives.