Former President Trump announced he is creating a media company that will merge with a SPAC to become a publicly traded stock. At a valuation pushing $20 billion, with no revenue or earnings, this overheated stock will return to earth.
Former President Trump announced on Thursday that a newly formed company, TMTG or Trump Media & Technology Group, would merge with Digital World Acquisition Corporation. Digital World is a SPAC or Special Purpose Acquisition Company that was formed in September and whose stock price had essentially been trading around $10 before the TMTG announcement. On Thursday the stock rose to $52 before closing at $45.50 and on Friday it hit a high of $175 and closed at $94.20. Digital World (symbol DWAC) raised $299 million on September 8 when it sold 29.9 million shares at $10 each. It appears from TMTG’s press release that essentially all the money that was raised will be available for TMTG to use. The devil will be in the details with the soon to be published SEC filings. Pushing a $20 billion market cap Prior to Digital World’s IPO there were 6.25 million shares sold for $25,000 or $0.004 per share as Founder shares, which from reading the prospectus are owned by Patrick Orlando, Digital World’s CEO. After the IPO these shares are a bit less than 20% of all the outstanding shares. After Digital World’s IPO it had just over 36 million outstanding shares.
