SEC Approves TMTG, Digital World Merger

The Securities and Exchange Commission has approved a merger between Truth Social owner Trump Media & Technology Group also known as TMTG and Digital World Acquisition Corp. (DWAC), a special-purpose acquisition company. The deal values Truth Social’s parent company at up to $10 billion.

As part of the merger agreement, pending shareholder approval, the merger would allow Trump Media to go public, with Donald Trump holding a significant ownership stake potentially worth $4 billion. Trump is expected to possess approximately 79 million shares in the combined entity, making him the largest investor.

Despite concerns about Truth Social’s financial sustainability and user base, the market value of the merger has tripled since January amid Trump’s increasing influence in the Republican presidential nomination race. Trump’s ownership in the combined company is estimated to range from 58.1% to 69.4%, depending on investor support.

Digital World stated that Trump might sell his stake and disengage from managing Truth Social based on his presidential ambitions.

The post-merger company’s board is poised to include several Trump affiliates, such as Donald Trump Jr., Robert E. Lighthizer, Linda McMahon, and Kash Patel.

Following the merger agreement with TMTG in October 2021, Digital World faced DOJ investigations, leadership changes, and regulatory challenges, culminating in an $18 million settlement with the SEC to settle allegations of misleading investors and violating antifraud regulations related to its initial merger plans.