Shareholders of Digital World Acquisition or the SPAC, a company planning to take Donald Trump's tech and social-media platform public, will vote on Mar. 22 about merging with Trump Media & Technology Group.
Per SPAC, Digital World aims to make Trump Media public through a reverse merger.
For context, Trump Media owns the conservative social-media platform Truth Social. If the merger happens, the new entity might trade on the Nasdaq with a ticker like TMTG.
However, the SPAC, based in Miami, has a history of delaying shareholder votes.
Prolonging the merger process can lead to higher transaction costs associated with legal, advisory, and administrative expenses. These costs may escalate over time as the merger process continues, potentially impacting the financial resources of the companies involved.
The problem is that Donald Trump needs cash at present. Having already facing difficulty in securing a bond of nearly half a billion dollars, he's still appealing his $454 million civil fraud case against him.
Based on a recent update by VCPost, his appeal has yet to go further, and his penalty will remain running at an additional $112,000 per day until he pays.
The value of Digital World stock is closely tied to the Trump brand. Trump's position as a leading Republican presidential candidate has boosted the stock's performance. Although there are concerns that legal issues could harm the brand, this scenario hasn't happened yet.
In fact, it's worth noting that the stock of Digital World rose sharply on Wednesday after the news of the Truth Social merger broke out.
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Will Donald Trump Lose More Money?
Whether Trump would lose money if Digital World Acquisition and Trump Media & Technology Group merged depends on the terms of the merger agreement, Trump's ownership stake in Trump Media, and the performance of the merged entity post-merger.
If Trump holds a major ownership stake in Trump Media and the merged company performs well, he could stand to gain financially from the merger.
Conversely, if the merged company encounters financial difficulties or if Trump's ownership stake is diluted as a result of the merger, he could experience losses.
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