Trump Seeks Stock Market Rescue to Pay $464m Fraud Fine
NEW YORK — Former US President Donald Trump appears to be in a desperate scramble for funds to settle a staggering $464m (£365m) fraud fine. Could the stock market come to his rescue?
Trump Media, the company behind the social media platform Truth Social, is on the brink of going public after a majority of Digital World Acquisition Corp shareholders voted to acquire it.
With a stake of at least 58% in the merged company, valued at nearly $3bn, Trump stands to gain a significant windfall despite warnings from the company’s own auditor last year that it was at risk of failure.
Despite multiple red flags surrounding the deal, including unresolved lawsuits and an $18m fraud settlement, supporters of Digital World remained unfazed.
The company, soon to be renamed Trump Media & Technology Group, is set to be listed on the Nasdaq stock exchange under the ticker DJT, potentially as early as next week.
However, this deal may not immediately resolve Trump’s financial troubles, including the massive fraud penalty in New York.
With restrictions on selling or transferring his shares for at least six months, Trump may explore other avenues such as securing a loan backed by the shares’ value, albeit with potential risks.
Despite the uncertainties, supporters like Chad Nedohin remain hopeful that their backing will assist Trump in his legal battles.
Analysts caution that Digital World shareholders face significant investment risks, with share prices fluctuating and the company’s financial performance not aligning with its valuation.
The merger is expected to inject over $200m in cash into Trump Media, allowing for potential growth and expansion opportunities.
However, Truth Social, positioned as an alternative to major social media platforms, remains relatively small with limited operational transparency.
Analysts classify Digital World as a “meme stock,” where share price is detached from fundamental company performance, potentially leading to a future downfall.
Despite uncertainties surrounding the deal, Trump stands to benefit significantly from the merger, leveraging his name and platform posts for potential financial gain.
“It’s an enormous transfer of value from [investors]… to Trump, which stands to be extremely lucrative for him,” says legal expert Michael Ohlrogge. — BBC
