One month after the merger was approved by regulators, shareholders of a publicly traded funding partner are voting on whether to join with Donald Trump Media & Technology Group, which could provide Trump up to $3.5 billion.
If shareholders of Digital World Acquisition Corp. give their approval, the companies may merge and Trump’s Truth Social social media network may go public. Following the incident on January 6, Trump was banned from Twitter and other networks.
This led to the creation of Truth Social.Digital World plans to rename Trump Media & Technology Group Corp.; the company will be formed without an IPO and trade under the stock ticker DJT, which is a play on Trump’s initials.
The business’s ownership cannot be transferred instantly by Trump Media because of a lock-up clause for major shareholders. Large investors are prevented by these limitations from selling their shares as soon as a company becomes public.
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It is also forbidden for the first investors to lend, sell, donate, or encumber their shares for a period of six months following the closing of the transaction. Experts in law contend that it might not be lawful to use stock as collateral.
Before the lock-up expires, Trump may sell his stock, or if the deal closes, the new board may change the lock-up terms. But doing so might subject the directors to legal scrutiny.
After the six months, Trump might sell his stock, but usually large shareholders don’t sell all of their stock at once to avoid undermining investor confidence and possibly flooding the market with shares, which could cause the stock price to plummet.
