Trump’s media company shares jump ahead of backdoor Nasdaq debut

By Thomson Reuters Mar 26, 2024 | 7:01 AM

(Reuters) – Shares of Donald Trump’s media and technology company jumped nearly 20% before the bell on Tuesday in the run-up to their Nasdaq debut after more than two years since its merger with a blank-check firm was announced.

Trump Media & Technology Group (TMTG), the parent of Trump’s preferred social media platform Truth Social, would be valued at as much as $8.71 billion based on the premarket trading price.

Trump’s majority stake in TMTG is now worth nearly $4 billion, although lock-up restrictions for six months could prevent him from selling or borrowing against his shareholding.

Trump, who is facing four criminal trials in his race to U.S. presidency, has been struggling to raise money for his campaign and legal expenses.

Meanwhile, a pause to a ruling that would have blocked New York state authorities from seizing his assets bought Trump some financial breathing room as he tries to build a campaign war chest and keep his real-estate empire intact.

The deal will inject $300 million cash to Truth Social, which had lost $10.6 million from its operations in the first nine months of 2023.

TMTG was among the top 15 most actively traded shares on the Nasdaq at 7:06 a.m. ET.

The company also provides a way for supporters of Trump to bet on his resurgence as a political figure, as evidenced by shares of shell company Digital World Acquisition nearly tripling in value this year.

A Reddit user Chester-Ming posted “the (Trump) hype has the potential to offset everything – shitty fundamentals, insane dilution and more”, on 15 million-large “wallstreetbets” investor forum, although the user warned that Trump could potentially cut his stake.

Digital World said in a filing last month that Trump may divest his stake in Truth Social and cease any involvement in its management based on how his bid for president goes.

The special purpose acquisition firm signed its merger agreement with Trump’s company in October 2021 and since then has been the target of investigations by the U.S. Department of Justice.

It reached an $18 million settlement with the U.S. securities regulator over inaccurate disclosures in July last year.

Shareholders voted in favor of the deal last week, more than a month after the regulator gave the green light for the deal.

(Reporting by Medha Singh in Bengaluru; Editing by Arun Koyyur)