The US Securities and Exchange Commission (SEC) has given the green light for former President Donald Trump's media and technology firm to merge with the blank-check acquisition company Digital World Acquisition Corp.
According to Reuters, the deal currently values the Trump Media & Technology Group (TMTG), the parent company of Trump's social media platform, Truth Social, at as much as $10 billion.
Donald Trump Got the Green Light From SEC to Return to Wall Street
The value assigned to the deal by the stock market has reportedly soared more than threefold since January following Donald Trump's victory in the Iowa Republican caucuses. Investors likely believed that the former president's re-emergence as a significant politician would make Truth Social more valuable.
Reuters reported that the valuation is almost half that of Elon Musk's more popular social media company, X. Truth Social reportedly has 8.9 million signups, while X has over half a billion monthly users.
The SEC clearance will pave the way for Digital World shareholders to vote to complete the merger. The date for the shareholders' vote will reportedly be set by Friday.
Since Digital World agreed to merge with TMTG in October 2021, it has encountered some challenges in its bid to complete it. The transaction has been the target of the US Department of Justice and the SEC's investigations. Leadership changes and board restructuring have also been made.
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Donald Trump Could Make a Fortune
According to CNN, Donald Trump's possible return to Wall Street could make him a fortune as he would own a stake that could be worth $4 billion at current prices if the merger goes through.
According to a regulatory filing on Wednesday, the former president is set to hold a dominant position in the newly combined company, owning roughly 79 million shares.
Based on Digital World's current trading price of around $50, Trump's 58.1% stake would be valued at $4 billion. In the filing, Digital World said Trump may divest his stake in Truth Social and end his involvement in its management based on how his presidential bid goes.
The filing also showed that TMTG, which was launched to connect the former president with his supporters after he was banned from major social media platforms following the January 6 Capitol attack, recorded total revenue of $3.4 million in the first nine months of 2023, higher than the $237,000 that was posted a year earlier.
According to CNN, the shareholders have a massive incentive to say yes to the deal since Digital World would be forced to liquidate if the merger fails, leaving shareholders with only $10 a share, compared with around $50 in the market now. On Thursday afternoon, the shares of Digital World jumped 16% to $50.49 in trading in New York.
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