Wall Street Debut of Trump’s Truth Social Network could Net Him Stock Worth Billions on Paper

AP Photo/John Minchillo
The Truth Social account for former President Donald Trump is seen on a mobile device, Wednesday, March 20, 2024, in New York. Trump’s Truth Social looks set to hit Wall Street in a move that could give him stock worth billions of dollars on paper.

NEW YORK (AP) — The Wall Street debut of Donald Trump’s Truth Social network could give him stock worth billions of dollars on paper. But the former president probably will not be able to cash it out right away, unless some things change.

The longer-term outlook for the business is highly questionable. Trump’s company has said it expects to continue losing money for a while, and at least one expert says it’s likely worth far less than the stock market suggests.

Trump’s pending return to Wall Street comes down to a vote scheduled for Friday by shareholders of a company named Digital World Acquisition Corp., which at the moment is essentially just a pile of cash. The corporation hopes to merge with Trump Media & Technology Group, the company behind Truth Social that goes by TMTG. If the shareholders approve the deal, TMTG could soon see its stock trading on the Nasdaq in Digital World’s place.

Here’s a look at the proposal and Trump’s role in it.


Shareholders of Digital World are scheduled to vote on whether to approve a merger with TMTG, where Trump is the chairman. Digital World is what’s called a special purpose acquisition company, or SPAC, or “blank-check company.”

SPACs raise cash and then hunt for companies to merge with. Such deals give the target companies a potentially quicker and easier way to get their stocks onto the New York Stock Exchange or Nasdaq. The arrangement lets them avoid some of the paperwork associated with traditional initial public offerings of stock, or IPOs.

For investors, SPACs offer a way to get into hyped, potentially faster-growing companies such as TMTG, the DraftKings betting service or SoFi banking.


It happens, but only rarely. This vote looks likely to pass given how high Digital World’s stock has jumped on excitement about Trump. It finished Thursday at $42.81 per share. It’s already up nearly 145% so far this year, towering over the roughly 10% gain for the S&P 500 index.

Many of Digital World’s investors are small-time investors who are either fans of Trump or trying to cash in on the mania, instead of big institutional and professional investors.


Digital World will merge with TMTG. The stock will continue to trade under Digital World’s ticker, DWAC, possibly for a couple of days to a couple of weeks, experts say. Then at some point, companies in SPAC deals usually announce that their stock will begin trading under the new ticker symbol.

Trump’s company hopes to trade under the ticker symbol DJT, the former president’s initials. The same ticker symbol was used by Trump Hotels & Casino Resorts before it filed for Chapter 11 bankruptcy protection in 2004.


Trump will own most of the new, combined company, or nearly 78.8 million shares, which would account for at least 58%. Multiply that by Digital World’s current stock price of more than $40, and the total value could surpass $3 billion.


Trump faces a $454 million judgment in a fraud lawsuit, among other financial burdens. But he cannot sell easily for at least six months. That’s because major TMTG shareholders will be under what’s called a “lock-up” provision, a common restriction on Wall Street that keeps big, early investors from immediately dumping their shares. Such sales could tank the stock’s price.

Investors under the lock-up deal cannot sell, lend, donate or encumber their shares for six months after the close of the deal. Legal experts say “encumber” is a powerful word that could prevent Trump from using the stock as collateral to raise cash before six months have elapsed.

There are a few exceptions, such as by transferring stock to immediate family members. But in such cases, the recipients would also have to agree to abide by the lock-up agreement.


Digital World could waive the lock-up agreement before the deal closes. Or, in what some legal experts say could be a more likely path, the new company’s board could decide to alter the lock-up agreement after the deal closes.

Such a decision by the board could open those directors up to legal scrutiny. They would need to show they’re doing it to benefit shareholders.

But if the value of Trump’s brand is key to the company’s success, and if easing the lock-up agreements could preserve that brand, it could make for a case that would at least spare board members’ lawyers from getting laughed out of court immediately.

Some companies’ boards in the past have altered lock-up agreements to allow investors to sell earlier.


Mostly people put forth by TMTG, including the former president’s son, Donald Trump Jr., if all goes as expected. Former Republican Rep. Devin Nunes would be a director and the company’s CEO.

Also on the board would be Robert Lighthizer, who served as Trump’s U.S. trade representative, and Linda McMahon, who ran the Small Business Administration under Trump.


Every stock has risks. Digital World has filed 84 pages with U.S. regulators to list many of its risks and those of TMTG.

One risk, the company said, was that as a controlling stockholder, Trump would be entitled to vote his shares in his own interest, which may not always be in the interests of all the shareholders generally.

It also cited the high rate of failure for new social media platforms, as well as TMTG’s expectation that the company will lose money on its operations “for the foreseeable future.” The company lost $49 million in the first nine months of last year, when it brought in just $3.4 million in revenue and had to pay $37.7 million in interest expenses.

“It’s losing money, there’s no way the company is worth anything like” what the stock price suggests, said Jay Ritter, an IPO specialist at the University of Florida’s Warrington College of Business.

“Here, given the stock price is so divorced from fundamental value, it’s kind of the same issue that came up with meme stocks,” he said, recalling companies whose share prices once soared far beyond what professionals considered rational. “With AMC and GameStop, the price was way above fundamental value, and there’s the question of: Can you get out before the music stops?”