Trump Risks Losing Financial Lifeline: A significant merger, which had the potential to yield billions for Donald Trump, now faces uncertainty following a lawsuit filed by the co-owners of his social media platform.
Recently, the Securities and Exchange Commission greenlit a merger plan involving Trump Media & Technology Group (TMTG), the company behind Truth Social, and Digital World Acquisition Corp. This merger could potentially net Trump close to $4 billion, as he stands to own a minimum of 58.1 percent of the shares in the new entity.
The co-founders of TMTG have accused executives, including Trump, of attempting to significantly reduce their ownership in the company through a stock grab. This accusation was made in a filing to the Delaware Chancery Court on Wednesday by United Atlantic Ventures (UAV), a partnership established by Andy Litinsky and Wes Moss.
Although this court filing has been widely discussed, Newsweek was unable to obtain the original document. Newsweek reached out to a representative for Trump via email for comment on the matter.
The merger, initially announced in October 2021, has faced repeated delays since then. Last September, investors of Digital World voted to grant an extension of up to one year to finalize the deal.
Potential issues arising from the merger could hinder Trump’s financial gains, thereby complicating his ability to cover his legal expenses, according to an expert. Todd Landman, a professor of Political Science at the University of Nottingham’s School of Politics and International Relations in the U.K., told Newsweek, “If the case is successful, then the merger and any windfall to Trump would be in jeopardy.”
The merger has faced delays for some time now, and any further postponement would hinder the former president from reaping financial benefits during a period where liquidity is crucial,” Landman commented.
UAV holds an 8.6 percent stake in TMTG and intends to increase its share count from 120 million to 1 billion, which would dilute its ownership. The company has also expressed concerns about plans allowing the former president to transfer his stock to family members or a trust, deeming it “alarming.”
“This is particularly concerning considering Trump’s outstanding civil judgments totaling over $500 million, with creditors knocking at his door,” the statement reads. “Indeed, the merger serves as a potential (and possibly existential) liquidity event for Trump, which could explain his last-minute stock acquisition,” the court filing mentioned, as cited by the Financial Times.
The Republican faces numerous legal expenses, leading to speculations that he may have to sell off some of his valuable assets to cover court fines.
In a recent legal development, Judge Arthur Engoron issued a judgment directing Trump to pay approximately $464.6 million in damages and interest for fraudulent actions. This decision follows a jury ruling in January, where Trump was ordered to pay $83.3 million in damages to former journalist E. Jean Carroll over defamatory statements made in 2019. Despite these rulings, Trump has maintained his innocence and is currently appealing both verdicts.
