Home » The risky business of Donald Trump’s $3.4 billion deal and looming bail woes

The risky business of Donald Trump’s $3.4 billion deal and looming bail woes

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The risky business of Donald Trump’s $3.4 billion deal and looming bail woes

Former President Donald Trump is in the spotlight once again, as he pleads with his followers to help raise over $450 million for his civil fraud case bail. Trump, who risks having his properties seized, is facing challenges in obtaining the necessary funds. However, Trump is on the brink of a lucrative deal that could make him $3.4 billion richer.

A shareholders meeting of Digital World Acquisition Corp (DWAC) is set to vote on a merger with Trump Media & Technology Group (TMTG), which owns the social network Truth Social. The price of DWAC shares has skyrocketed, with the company becoming a meme stock driven by market speculation rather than economic fundamentals.

Despite the potential windfall from the merger, TMTG has minimal revenue and significant losses. The company’s financials reveal a turnover of $3.4 million and losses of $49 million between January and September 2023.

The approval of the merger is not guaranteed, as a wayward shareholder controlling almost 15% of the capital poses a challenge. DWAC has filed a lawsuit against the shareholder to ensure a favorable vote for the agreement.

If the merger proceeds, Trump’s ability to sell his shares will be restricted for the first six months. The market’s valuation of the company remains a point of contention, with concerns about a collapse if the valuation does not align with investors’ expectations.

The merger deal highlights Trump’s control over New Digital World, with the former president set to control at least 58.1% of the voting rights. TMTG intends to utilize the funds from the merger to fuel its growth and attract Republican voters to its network.

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Trump founded Truth Social after being banned from Twitter and Facebook. Despite his return to Twitter following Elon Musk’s purchase of the platform, Trump’s presence on social media remains a key factor for TMTG’s success.

As the merger decision looms, the potential risks and uncertainties surrounding Trump’s involvement in TMTG continue to be a focal point. The company’s reliance on Trump’s popularity and credibility underscores the challenges ahead for the business.

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