Feb 28, 2024 - Business

Donald Trump's financial rescue has a hiccup

Illustration of a happy and mad President Trump-shaped emojis

Illustration: Sarah Grillo/Axios

Here's the good news for Donald Trump: His stake in the parent company of Truth Social could be worth more than $3 billion, which is well more than his current legal penalties.

Here's the bad news for Donald Trump: There's yet another hiccup in the belabored effort to take Truth Social public.

By the numbers: Trump is facing a $454 million penalty (including interest) for civil fraud in New York, plus the $83.3 million he owes for defaming writer E. Jean Carroll. Not to mention all the associated legal fees.

  • He is expected to have around 79 million shares in Trump Media & Technology Group (TMTG), once taken public via a blank-check company called Digital World Acquisition (DWAC), whose shares opened Wednesday at nearly $45.

Behind the scenes: DWAC late last week disclosed that TMTG co-founders Andy Litinsky and Wes Moss have threatened to try to block the merger unless they receive board seats to which they claim they're entitled.

  • Earlier in the month, DWAC also disclosed a compensation dispute with its own former CEO, Patrick Orlando, which it said "presents a risk to our ability to consummate the business combination on a timely basis (or at all)."

Look ahead: DWAC has scheduled a March 22 shareholder vote, having recently received SEC approval to merge, but has repeatedly delayed such votes in the past.

  • If the vote occurs and succeeds, Trump still would need to obtain a lockup provision waiver if he wanted to sell shares within the first six months, as noted by the NY Times' Matthew Goldstein.
  • That, of course, could get complicated by who's ultimately on the board.

The bottom line: This merger is as chaotic as the early days of the Trump administration and, in classic Trump fashion, involves former business partners claiming they're owed more than they're getting.

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