Trump’s media company will go public, an oxygen for its finances

Donald Trump’s media company will merge with an inactive firm listed on Wall Street, following the favorable decision of a shareholders meeting on Friday that gives a breath of oxygen to the former president amid his legal financial difficulties.

This vote and the IPO will allow the candidate for the Republican presidential nomination and former president to obtain funds to cover his legal expenses and the campaign with which he seeks to return to the White House.

The merger project appeared uncertain before the general shareholders meeting, as the vote had been postponed several times in the last two and a half years due to lack of quorum.

The billionaire real estate developer said this week that he cannot raise a guarantee close to US$500 million while appeals to the fine imposed on him by a judge for financial fraud in a ruling handed down in February are resolved.

At the end of that process that began in 2022, Trump and his eldest sons, Eric and Donald Jr., were sentenced to pay $464 million in fines and interest for lying more than a decade ago about the value of Trump’s real estate assets. Organization.

Trump has since been under pressure due to the possibility of actions being taken against his real estate assets if he does not provide the New York state justice system with guarantees on March 25 that he will pay if the sentence is confirmed.

Before the shareholder vote, the Republican magnate criticized the New York justice system on his social network.

“No trial, no jury, no crime, no victim. Just a corrupt judge and a corrupt attorney general who hates Trump and takes his orders directly from the White House. Electoral interference at a level never seen before! ”She launched in a message written in capital letters to give an idea of ​​his anger. He was alluding to Judge Arthur Engoron and New York Attorney General, Democrat Letitia James, who put him in the dock for tax fraud.

What will the merger be like?

Regarding the operation, the company Trump Media and Technology Group (TMTG) will merge with what is known as a publicly traded vehicle under the acronym DWAC (Digital World Acquisition Corp).

These types of companies, known as SPACs, are a kind of empty shell whose sole purpose is to allow a company to go public more quickly than through the traditional route of an offering of shares to the public.

TMTG, of which Donald Trump is the main shareholder, will control several tens of millions of shares of the new company resulting from the merger.

According to various estimates, his stake would amount to more than $3 billion at DWAC’s current share price of almost $40.

The agreement between TMTG and DWAC provides for a six-month lock-in period during which shareholders cannot sell their securities on the market.

But nothing would prevent Trump from proposing his actions as a guarantee for justice, or from obtaining a loan based on the value of these securities.

Paradoxically, the former president’s media company has reduced activity. He commands the social network Truth Social, launched in February 2022, which has made a few million dollars since its creation.

The paths of justice

What will happen if Monday does not provide a guarantee to Justice?

“You will face humiliation and serious financial consequences“Professor Carl Tobias, from the University of Richmond School of Law, in Virginia (east), told AFP.

In a statement issued on Thursday, Trump again attacked a “unconstitutional and illegal demand for a financial guarantee”.

Tobias points out that Trump “could sell personal property” either “try to obtain a bank loan or declare bankruptcy”.

Justice could “try to seize the money you have in New York and some of your real estate assets“added the expert. Trump owns Trump Tower on Fifth Avenue and a tower on Wall Street.