Shareholders voted Friday to take former president Donald Trump’s media company public, a long-delayed move that will open the owner of Truth Social to stock-market investors and grant Trump a stake worth billions of dollars that he could use to pay down his legal debts.
Media
Trump Media merger approved, could mean billions for Trump – The Washington Post
Friday’s vote by investors in Digital World Acquisition authorized the special purpose acquisition company, or SPAC, to merge with Trump Media & Technology Group as part of a process that will avoid a more traditional public offering.
Trump will own about 60 percent of the company, which at Digital World’s current share price would be worth about $2.9 billion. But trading on the stock market also will open the company to more public scrutiny, and any drops in share prices will affect the value of his stake.
Digital World’s stock price plunged more than 13 percent Friday, to just under $37. Because Trump will own roughly 78 million shares in the post-merger company, the fall in price cut Trump’s paper take from the deal by around $457 million.
Trump’s allies and company executives will be granted bundles of shares in the new company that could be worth millions of dollars. Trump and other investors could earn tens of millions more shares through an “earnout” provision tied to the stock’s performance, Digital World said in a Securities and Exchange Commission filing.
Some critics have said Trump Media is a “meme stock” with a more than $5 billion valuation they say is out of sync with its financial outlook. Trump Media lost $49 million in the first nine months of last year and brought in $3.4 million in revenue, Digital World said in an SEC filing.
Digital World raised $300 million from investors that will carry over to Trump Media. But some of that money will go toward the SPAC’s more than $60 million in liabilities as well an $18 million settlement with the SEC, which Digital World agreed to last year after regulators charged it with misleading investors about its merger plans.
A lockup provision in the merger agreement will prevent Trump and other major investors from selling their shares for six months unless he is granted a waiver by the post-merger company’s board.
The provision could limit Trump’s ability to use the windfall to help pay off the hundreds of millions of dollars he owes in legal judgments. Trump does not have the cash to secure a bond that would delay enforcement of the $464 million judgment in a New York fraud case, his lawyers said. If he does not post a bond by Monday, the state’s attorney general could move to seize his bank accounts, real estate and other assets.
Any lockup change or waiver will be decided by the post-merger company’s board, which will be stocked with Trump allies, an SEC filing shows. The board’s nominees include Trump’s oldest son, Donald Trump Jr.; Trump’s former trade representative, Robert E. Lighthizer; Linda McMahon, who headed the Small Business Administration under Trump; and Kash Patel, who served on Trump’s National Security Council.
But lockups are standard provisions in corporate deals and very rarely overturned, according to three SPAC experts who spoke with The Washington Post. Big investors and investment bankers, they said, often insist on the provisions because they give investors confidence that major shareholders won’t look for an early exit and possibly drive down the price.
If Trump or other shareholders were given a lockup waiver, other investors might be concerned that they could “flood the market because they have so many shares” or look to be “cashing out to leave the company because they don’t think well of its prospects,” said Usha Rodrigues, a University of Georgia law professor who studies SPACs.
If the share price plunged after Trump received a lockup waiver, the move could also open the company to shareholder lawsuits arguing it had unfairly damaged their financial stake, said Michael Ohlrogge, a New York University associate law professor.
“Because of this big liability risk, I have a hard time imagining a company granting a lockup waiver,” Ohlrogge said. “It could easily have an extremely large, negative impact on the share price. At the same time, even if doing this made the price fall by 90 percent, the whole deal would still end up being extremely lucrative for” Trump.
The post-merger company will retain the Trump Media name and be led by Devin Nunes, the former Republican representative from California. The company could begin trading on the Nasdaq stock exchange as soon as Monday under the ticker symbol of Trump’s initials, DJT. That symbol was also used for Trump’s only other public company, Trump Hotels and Casino Resorts, which collapsed into a penny stock in less than a decade and filed for bankruptcy in 2004.
Truth Social has become Trump’s main online megaphone and a gathering place for Trump supporters. Though it launched as an alternative to Twitter, the platform retains a small fraction of its online audience. Trump’s Truth Social account has 6.7 million followers, compared to the 88 million he had on Twitter in 2021.
Trump said in a Truth Social post on Thursday before the vote, “TRUTH SOCIAL IS MY VOICE, AND THE REAL VOICE OF AMERICA!!! MAGA2024!!!”
Two former contestants from his reality show “The Apprentice” proposed the idea of a “free speech” media and internet business to Trump after he was kicked from Twitter and other social networks following the U.S. Capitol riots on Jan. 6, 2021.
The company’s merger proposal with Digital World has faced years of hurdles and delays since then due to investigations by the SEC and the Justice Department, which has probed insider-trading and money-laundering allegations involving Digital World investors.
Last summer, when the deal’s certainty was in doubt, Trump asked billionaire Elon Musk whether he wanted to buy Truth Social, two people with knowledge of the conversation told The Post. The proposal went nowhere, though the two men have communicated since.
More recently, the deal has been embroiled in a legal battle royale, with four lawsuits in three states involving Trump Media, Digital World, co-founders Andy Litinsky and Wes Moss, and Digital World’s former chief executive, Patrick Orlando.
Orlando — who was fired as chief last year but remains in control of Digital World’s biggest founding investor, Arc Global Investments II — had refused to vote in support of the merger before Friday’s vote, potentially imperiling the deal, attorneys for Trump Media and Digital World said in a lawsuit this week seeking to force his vote. Orlando spoke only briefly on the shareholder call Friday and did not offer further comment on how he voted.
Digital World’s more than 400,000 retail investors included supporters of Trump and speculators hoping to cash in on the deal’s attention. One investor, dressed in a pirate costume and calling himself “Captain DWAC,” live-streamed the shareholder vote on the video site Rumble and played sounds of applause when the successful vote was announced.
“Lots of hugs,” said the investor, Chad Nedohin, a worship leader in Canada. “This has been a long, long fight.”
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Media
What to stream this weekend: ‘Civil War,’ Snow Patrol, ‘How to Die Alone,’ ‘Tulsa King’ and ‘Uglies’
Hallmark launching a streaming service with two new original series, and Bill Skarsgård out for revenge in “Boy Kills World” are some of the new television, films, music and games headed to a device near you.
Also among the streaming offerings worth your time as selected by The Associated Press’ entertainment journalists: Alex Garland’s “Civil War” starring Kirsten Dunst, Natasha Rothwell’s heartfelt comedy for Hulu called “How to Die Alone” and Sylvester Stallone’s second season of “Tulsa King” debuts.
NEW MOVIES TO STREAM SEPT. 9-15
— Alex Garland’s “Civil War” is finally making its debut on MAX on Friday. The film stars Kirsten Dunst as a veteran photojournalist covering a violent war that’s divided America; She reluctantly allows an aspiring photographer, played by Cailee Spaeny, to tag along as she, an editor (Stephen McKinley Henderson) and a reporter (Wagner Moura) make the dangerous journey to Washington, D.C., to interview the president (Nick Offerman), a blustery, rising despot who has given himself a third term, taken to attacking his citizens and shut himself off from the press. In my review, I called it a bellowing and haunting experience; Smart and thought-provoking with great performances. It’s well worth a watch.
— Joey King stars in Netflix’s adaptation of Scott Westerfeld’s “Uglies,” about a future society in which everyone is required to have beautifying cosmetic surgery at age 16. Streaming on Friday, McG directed the film, in which King’s character inadvertently finds herself in the midst of an uprising against the status quo. “Outer Banks” star Chase Stokes plays King’s best friend.
— Bill Skarsgård is out for revenge against the woman (Famke Janssen) who killed his family in “Boy Kills World,” coming to Hulu on Friday. Moritz Mohr directed the ultra-violent film, of which Variety critic Owen Gleiberman wrote: “It’s a depraved vision, yet I got caught up in its kick-ass revenge-horror pizzazz, its disreputable commitment to what it was doing.”
NEW MUSIC TO STREAM SEPT. 9-15
— The year was 2006. Snow Patrol, the Northern Irish-Scottish alternative rock band, released an album, “Eyes Open,” producing the biggest hit of their career: “Chasing Cars.” A lot has happened in the time since — three, soon to be four quality full-length albums, to be exact. On Friday, the band will release “The Forest Is the Path,” their first new album in seven years. Anthemic pop-rock is the name of the game across songs of love and loss, like “All,”“The Beginning” and “This Is the Sound Of Your Voice.”
— For fans of raucous guitar music, Jordan Peele’s 2022 sci-fi thriller, “NOPE,” provided a surprising, if tiny, thrill. One of the leads, Emerald “Em” Haywood portrayed by Keke Palmer, rocks a Jesus Lizard shirt. (Also featured through the film: Rage Against the Machine, Wipers, Mr Bungle, Butthole Surfers and Earth band shirts.) The Austin noise rock band are a less than obvious pick, having been signed to the legendary Touch and Go Records and having stopped releasing new albums in 1998. That changes on Friday the 13th, when “Rack” arrives. And for those curious: The Jesus Lizard’s intensity never went away.
— AP Music Writer Maria Sherman
NEW SHOWS TO STREAM SEPT. 9-15
— Hallmark launched a streaming service called Hallmark+ on Tuesday with two new original series, the scripted drama “The Chicken Sisters” and unscripted series “Celebrations with Lacey Chabert.” If you’re a Hallmark holiday movies fan, you know Chabert. She’s starred in more than 30 of their films and many are holiday themed. Off camera, Chabert has a passion for throwing parties and entertaining. In “Celebrations,” deserving people are surprised with a bash in their honor — planned with Chabert’s help. “The Chicken Sisters” stars Schuyler Fisk, Wendie Malick and Lea Thompson in a show about employees at rival chicken restaurants in a small town. The eight-episode series is based on a novel of the same name.
— Natasha Rothwell of “Insecure” and “The White Lotus” fame created and stars in a new heartfelt comedy for Hulu called “How to Die Alone.” She plays Mel, a broke, go-along-to-get-along, single, airport employee who, after a near-death experience, makes the conscious decision to take risks and pursue her dreams. Rothwell has been working on the series for the past eight years and described it to The AP as “the most vulnerable piece of art I’ve ever put into the world.” Like Mel, Rothwell had to learn to bet on herself to make the show she wanted to make. “In the Venn diagram of me and Mel, there’s significant overlap,” said Rothwell. It premieres Friday on Hulu.
— Shailene Woodley, DeWanda Wise and Betty Gilpin star in a new drama for Starz called “Three Women,” about entrepreneur Sloane, homemaker Lina and student Maggie who are each stepping into their power and making life-changing decisions. They’re interviewed by a writer named Gia (Woodley.) The series is based on a 2019 best-selling book of the same name by Lisa Taddeo. “Three Women” premieres Friday on Starz.
— Sylvester Stallone’s second season of “Tulsa King” debuts Sunday on Paramount+. Stallone plays Dwight Manfredi, a mafia boss who was recently released from prison after serving 25 years. He’s sent to Tulsa to set up a new crime syndicate. The series is created by Taylor Sheridan of “Yellowstone” fame.
NEW VIDEO GAMES TO PLAY
— One thing about the title of Focus Entertainment’s Warhammer 40,000: Space Marine 2 — you know exactly what you’re in for. You are Demetrian Titus, a genetically enhanced brute sent into battle against the Tyranids, an insectoid species with an insatiable craving for human flesh. You have a rocket-powered suit of armor and an arsenal of ridiculous weapons like the “Chainsword,” the “Thunderhammer” and the “Melta Rifle,” so what could go wrong? Besides the squishy single-player mode, there are cooperative missions and six-vs.-six free-for-alls. You can suit up now on PlayStation 5, Xbox X/S or PC.
— Likewise, Wild Bastards isn’t exactly the kind of title that’s going to attract fans of, say, Animal Crossing. It’s another sci-fi shooter, but the protagonists are a gang of 13 varmints — aliens and androids included — who are on the run from the law. Each outlaw has a distinctive set of weapons and special powers: Sarge, for example, is a robot with horse genes, while Billy the Squid is … well, you get the idea. Australian studio Blue Manchu developed the 2019 cult hit Void Bastards, and this Wild-West-in-space spinoff has the same snarky humor and vibrant, neon-drenched cartoon look. Saddle up on PlayStation 5, Xbox X/S, Nintendo Switch or PC.
Former President Donald Trump is on the brink of a significant financial decision that could have far-reaching implications for both his personal wealth and the future of his fledgling social media company, Trump Media & Technology Group (TMTG). As the lockup period on his shares in TMTG, which owns Truth Social, nears its end, Trump could soon be free to sell his substantial stake in the company. However, the potential payday, which makes up a large portion of his net worth, comes with considerable risks for Trump and his supporters.
Trump’s stake in TMTG comprises nearly 59% of the company, amounting to 114,750,000 shares. As of now, this holding is valued at approximately $2.6 billion. These shares are currently under a lockup agreement, a common feature of initial public offerings (IPOs), designed to prevent company insiders from immediately selling their shares and potentially destabilizing the stock. The lockup, which began after TMTG’s merger with a special purpose acquisition company (SPAC), is set to expire on September 25, though it could end earlier if certain conditions are met.
Should Trump decide to sell his shares after the lockup expires, the market could respond in unpredictable ways. The sale of a substantial number of shares by a major stakeholder like Trump could flood the market, potentially driving down the stock price. Daniel Bradley, a finance professor at the University of South Florida, suggests that the market might react negatively to such a large sale, particularly if there aren’t enough buyers to absorb the supply. This could lead to a sharp decline in the stock’s value, impacting both Trump’s personal wealth and the company’s market standing.
Moreover, Trump’s involvement in Truth Social has been a key driver of investor interest. The platform, marketed as a free speech alternative to mainstream social media, has attracted a loyal user base largely due to Trump’s presence. If Trump were to sell his stake, it might signal a lack of confidence in the company, potentially shaking investor confidence and further depressing the stock price.
Trump’s decision is also influenced by his ongoing legal battles, which have already cost him over $100 million in legal fees. Selling his shares could provide a significant financial boost, helping him cover these mounting expenses. However, this move could also have political ramifications, especially as he continues his bid for the Republican nomination in the 2024 presidential race.
Trump Media’s success is closely tied to Trump’s political fortunes. The company’s stock has shown volatility in response to developments in the presidential race, with Trump’s chances of winning having a direct impact on the stock’s value. If Trump sells his stake, it could be interpreted as a lack of confidence in his own political future, potentially undermining both his campaign and the company’s prospects.
Truth Social, the flagship product of TMTG, has faced challenges in generating traffic and advertising revenue, especially compared to established social media giants like X (formerly Twitter) and Facebook. Despite this, the company’s valuation has remained high, fueled by investor speculation on Trump’s political future. If Trump remains in the race and manages to secure the presidency, the value of his shares could increase. Conversely, any missteps on the campaign trail could have the opposite effect, further destabilizing the stock.
As the lockup period comes to an end, Trump faces a critical decision that could shape the future of both his personal finances and Truth Social. Whether he chooses to hold onto his shares or cash out, the outcome will likely have significant consequences for the company, its investors, and Trump’s political aspirations.
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