#TrumpMedia merger wins investor approval, netting #Trumppotential windfall
TFG will own ~60% of #TruthSocial, which at its current share price would be worth ~$3.3B.
A lockup agreement will prevent him from selling the shares for 6 months.
A long-delayed move that will open the owners of TruthSocial to stock-market investors & grant Trump a stake worth billions he could use to pay down his #legal#debts.
The vote Fri by investors in #DWA authorized the #SPAC, to merge w/ #TrumpMedia & #Tech Grp as part of a process that will avoid a more traditional #IPO. #Trump will own ~60%, which at DWA’s current share price would be worth ~$3.3B. He & other investors could earn tens of millions more shares through an “earnout” provision tied to the stock’s performance, DWA said in an #SEC filing.
The merger will net TrumpMedia $300M that DWA initially raised from investors.
#Trump’s allies & company execs will also be granted bundles of shares in the new company that could be worth millions. But trading on the #stockmarket will also open the company to more public scrutiny, & any drops in share prices would affect the value of those stakes.
Critics have said #TrumpMedia is a “#MemeStock” w/a >$6B valuation they say is out of sync w/its financial outlook. TrumpMedia lost $49M in the first 9 months of last yr & brought in just $3.4M in revenue, per #DWA#SEC filing.
A #LockupProvision in the #merger will prevent #Trump & other major investors from selling shares for 6 months unless granted a waiver by the post-merger co’s board.
That could limit Trump’s ability to use the windfall to help pay off hundreds of millions he #owes in #legal#judgments. Trump doesn’t have the $ to secure a #bond to delay enforcement of the $464M judgment in NY #fraud case. If he doesn’t post by Mon, #NYAG could seize his #BankAccounts, #RealEstate & other #assets.
I totally don't get this stuff. But doesn't Trump owning 60% give him control of the board? So it should be a trivial exercise to give himself permission to sell.
@Darryl there will be a new board post merger. Also the shareholders to agree to the merger, contractually stipulated a 6 month waiting period post public offering for major shareholders to sell to ensure that they weren’t left holding worthless shares. Good reason too - if Trump sell out, then the company stock plummets. Though there’s an argument to be made that the same is true if he’s in jail. A compromise may be to let him sell some shares & get the rest of the $ elsewhere.
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