The value of Digital World Acquisition Corp shares experienced significant fluctuations on Thursday, leading up to a crucial shareholder vote on the merger with Trump Media & Technology Group.
The vote on Friday, as experts have indicated to Newsweek, is expected to pass and could have a major impact on the financial interests of former President Donald Trump. This development comes at a time when Trump is publicly facing challenges in obtaining a bond for a $454 million civil judgment.
If the shareholders of Digital World Acquisition Corp (DWAC) approve the vote on Friday, the Trump Media & Technology Group (TMTG), led by former president Trump, will transition into a publicly traded company. This significant milestone represents the culmination of years of effort to bring the company onto the stock market.
The merger is set to occur, resulting in the rebranding of DWAC as Trump Media & Technology Group Corp. This move would grant Trump a significant stake in the company, which is estimated to be worth billions based on current share prices.
The latest ownership document submitted to the SEC last month reveals that the former president is on the brink of a potential windfall. This windfall could result in him owning 78,750,000 shares, which would equate to 58.1 percent of the public float. At the current prices, this would be valued at $3.37 billion. However, it is important to note that this potential gain will not come without its challenges.
Earlier this week, DWAC filed a lawsuit against its largest investor, ARC Global Investments II, which has created uncertainty surrounding the ongoing proceedings.
According to DWAC, they have filed a lawsuit claiming that ARC and its managing member, Patrick Orlando, are going back on their agreement to support the merger. This is despite their previous statement expressing their belief in the merits of the deal. DWAC alleges that this refusal is merely an attempt by Orlando to obtain undeserved concessions.
Orlando is also accused in the complaint of trying to sway other shareholders and putting the transaction at risk, which could result in DWAC losing millions of dollars and even facing dissolution if the merger does not go through.
DWAC has filed a request for a judge to intervene and compel ARC to vote in favor of the merger. According to the complaint, ARC’s refusal to vote is seen as a strategic move aimed at extracting improper concessions at the last minute, rather than reflecting their actual stance on the merger.
“It reads, ‘There are no exceptions despite Patrick Orlando, ARC’s managing member, wanting to hold ARC’s vote hostage for his personal financial gain.'”
The fate of the merger hinges on the shareholder vote, which is now under intense scrutiny due to ARC’s potential participation. The approval of this vote could potentially boost Trump’s financial portfolio, especially as he currently refuses to sell his assets to cover his bond obligations.
The predicament of the former president was highlighted on Truth Social, where he expressed his concerns. He emphasized that selling his assets before the appeal would result in permanently losing them. Additionally, he mentioned that providing funds for the appeal process is a costly affair. He firmly believed that if he were to win the appeal, all the money invested would be wasted, as he firmly believed he had done nothing wrong.
Despite a month-long duration, the GoFundMe campaign aimed at raising $355 million to support Trump’s financial situation has greatly underperformed, managing to generate less than $2 million in donations.
According to investment strategist Matt Tuttle, founder of Tuttle Capital Management, the approval of the merger is highly likely. Tuttle believes that this merger could provide Trump with a valuable source of liquidity.
According to Tuttle, there are various ways in which he could potentially utilize his stake. He could seek someone to lend against it or negotiate with the company to allow him to sell it.
Tuttle expressed his opinion, stating, “I believe that if Trump had to choose between selling some of his stock or having his property taken over by New York, it would be an easy decision.” This suggests that Trump would rather sell a portion of his DWAC stake than face the civil penalties imposed by New York State Supreme Court Justice Arthur Engoron, following the lawsuit filed and eventually won by New York Attorney General Letitia James.
Friday’s vote has far-reaching implications that go beyond the merger itself. According to Tuttle, DWAC is commonly referred to as the “election stock.” This suggests that if the approval is granted, it would signal Trump’s increased presence in the public market. It is worth noting that Trump has had a mixed track record in this arena, particularly with his previous venture, Trump Hotels and Casino Resorts, which ended up declaring bankruptcy.
The direction of the stock in the days ahead could provide insights into market sentiment regarding the stability and potential of the proposed merger and, consequently, the future of Trump’s business venture with Truth Social.