The Securities and Exchange Commission (SEC) gave the green light on Thursday for a merger between Donald Trump’s social media company and the special purpose acquisition company that will allow it to become a publicly traded company, according to a new report from the Wall Street Journal.
The SEC declared effective the Registration Statement on Form S-4 for the proposed business combination between Trump Media and Technology Group and Digital World Acquisition Corp after long delays. The merger was first proposed in late 2021 but had been hindered by investigations by the SEC and the U.S. Department of Justice. Trump will hold more than 78 million shares in the newly created company, a 58.1% stake, which is worth about $4 billion at just over $50 per share as of Thursday afternoon.
DWAC’s stock soared 30% on the news of the merger approval Thursday morning, though fell approximately 15% throughout the day. The stock has surged 124% since a month ago when Trump won the Iowa caucuses, besting his closest opponent, former South Carolina governor Nikki Haley, by double digits. While Haley has pledged to remain in the race, Trump is still considered the favorite to become the Republican nominee for president this year despite several criminal indictments at both the state and federal level.
The new company’s current valuation is somewhere in the neighborhood of approximately $7 billion at the current stock price, an astounding figure for a company with relatively few active users. Truth Social has less than 1 million active users, according to CNN. Trump’s messages on the platform are widely distributed across other networks, which, paradoxically, somewhat reduces the need for some people to join Truth Social to read Trump’s messages. The former president was suspended from major social media platforms such as Facebook and Twitter after the events of January 6, 2021. And while both platforms have said he can return, Trump has opted to stay exclusively on Truth Social.
The big selling point of Truth Social is the fact that it’s when Trump posts exclusively, but the CEO of the platform is doing his best to try to convince potential users it’s the only company that cares about free speech.
“Truth Social was created to serve as a safe harbor for free expression and to give people their voices back. Moving forward, we aim to accelerate our work to build a free speech highway outside the stifling stranglehold of Big Tech,” the CEO of Trump Media and Technology Group Devin Nunes said in a statement filed with the SEC.
Nunes, a former Republican congressman from California, sued Twitter over two parody accounts that were making fun of him. The court dismissed Twitter from the case in June 2020.
