Trump’s Social Media Company Truth Social Is Going Public

Shareholders of the publicly traded shell company Digital World Acquisition Corp approved merging with Trump Media & Technology Group, which owns the social networking site Truth Social. This officially makes Trump’s social media business a public traded company on the Nasdaq stock market.

Trump owns 58% of the shares of the combined company. Currently valued at $4.6 billion – at least on paper – Trump Media & Technology Group ended its first day with a 16% rise in stock prices. The possible financial gains seem to arrive at the right time for the former president who is facing a $454-million judgment in a civil fraud case.

Still, as part of his agreement with Digital World Acquisition Corp, Trump won’t be able to cash out on Truth Social going public immediately. He and other company insiders must wait at least six months before selling any shares. During this time, the stock price could change drastically.

Digital World is mostly backed by small investors who are either Trump fans or hope to capitalize on Truth Social potentially gaining momentum. They helped raise the stock more than double ahead of the merger. After clearing the deal, shares fell by 12% immediately, signaling a rocky road ahead.

Digital World listed the risks its investors could face in this merger. Trump, as a controlling stakeholder, could easily vote in his own interest, which might differ from the shareholder’s best interest. Another risk is the high rate of failure of new social media platforms and Trump Media’s expectation of losing money “for the foreseeable future” to keep running.

Trump Media launched in 2022 and lost $49 million in its first nine months of operation, bringing only $3.4 million in revenue and owing $37.7 million in interest rates. It’s unclear how profitable Truth Social could become because advertisers typically refrain from working with controversial figures, similar to advertisers leaving X due to Elon Musk’s outspoken personality.

Trump also needs to pay E. Jean Carroll $83 million in a defamation lawsuit that saw Truth Social posts serving as evidence against Trump.