Digital World Acquisition Corp. stock price chart in the times leading as much as shareholder approval of the merger, including Donald Trump’s social media company.
CNBC
Donald Trump on Saturday told his many online followers: “I LOVE TRUTH SOCIAL” – but shareholders of the newly merged company that may own the social media app will not be feeling so great after the value plummeted a day earlier.
In the next hours, the shell company’s share price dropped by almost 14%. shareholder Friday morning’s approval of a merger with the previous president’s social media company to go public.
If the decline gathers pace in the approaching weeks, the worth of Trump’s majority stake within the newly combined company, dubbed Trump Media, may very well be barely lower than the roughly $3 billion estimate before shareholders signed the deal on Friday.
DWAC shares, which hit a 52-week high of $58.72 a share on Jan. 23 as a long-stalled merger seemed more likely, fell to $44.20 a share after trading opened Friday morning just before the shareholder vote.
DWAC stock closed Friday afternoon at $36.94 per share.
In after-hours trading, shares recovered barely to $38.55 per share. However, it was still 12.7% lower than Friday’s opening price.
The decline may reflect concerns about whether Trump’s Media and Technology Task Forcewhich is connected to DWAC, could ultimately provide significant revenue – and whether Trump will attempt to monetize his stake early as a result of quite a few legal issues.
TMTG, the owner of the Trump Social platform through which Trump announced his love for the app on Saturday, reported losses of just about $50 million in the primary three fiscal quarters of 2023. During that point, it reported revenue of just below $3.5 million.
Meanwhile, Trump faces half a billion dollars in civil judgments from federal and state courts in New York, in addition to settlements from those cases and 4 criminal prosecutions in connection together with his try and overthrow President Joe Biden within the November election.
Last week, Trump’s lawyers said in a court filing that he didn’t have the money to acquire an appellate bond securing a $454 million fraud verdict in one in all those cases. This would prevent the New York Attorney General’s Office from collecting fees for this award for now.
Under the terms of the merger, Trump, who will own at the least 58% of Trump Media, won’t give you the option to sell shares of the corporate for six months.
However, the brand new board, on which his son Donald Trump Jr. is to sit down. and other close allies, could vote to lift that restriction, which might allow him to sell shares much earlier to cover legal costs.
This, in turn, could lead on to a decline in Trump Media’s share price and prompt other shareholders to sell shares, further reducing share prices.
Next week, Trump Media will use the ticker symbol DJT when it begins trading on the NASDAQ exchange.
The same ticker was used for Trump’s previous publicly traded company, Trump hotels and casinoswhose shares have been listed on the New York Stock Exchange since 1995.
The company lost money yearly of its operation and filed for bankruptcy protection in 2004, the identical yr it was delisted.
