Cornered by Massive Legal Costs
Likely to Liquidate Shares via Board of Directors
Donald Trump, the former president aiming to re-enter the White House this November, saw his social networking service (SNS) 'Truth Social' surge 16% on its first day of listing on the New York Stock Exchange. As Trump faces massive legal costs due to judicial risks, the listing of Truth Social has put him on a financial windfall, drawing attention to whether this will resolve his funding difficulties.
On the 26th (local time), Truth Social's parent company, Trump Media & Technology Group (TMGT), closed trading at $57.99, up 16.1% on its first day on the New York Stock Exchange. The stock ticker was changed to DJT, reflecting the former president's initials.
TMGT soared 59% after the market opened that day, fluctuated throughout the day, and ended with a 16% gain. Trading was temporarily halted in the early session. Even before TMGT's debut on the NYSE, its corporate value had risen significantly. Digital World Acquisition Corp (DWAC), a special purpose acquisition company that acquired TMGT, had been trading on the NYSE before the merger, and its stock surged 232% this year as the merger process progressed.
Currently, TMGT's market capitalization reaches $8 billion (approximately 10.75 trillion KRW). This is on par with the corporate values of US Steel, footwear company Skechers, and investment bank Jefferies. Analysts say that supporters of former President Trump are driving up TMGT's stock price by purchasing shares.
Trump's asset value has also increased significantly. Holding about 60% of TMGT shares, Trump’s asset value from this listing alone amounts to $4.5 billion (approximately 6 trillion KRW).
The market views the Truth Social listing as perfectly timed for Trump, who is cornered by judicial risks. The day before, the New York State Appellate Court reduced the appeal bond for Trump’s real estate fraud loan penalty case from $454 million (about 610 billion KRW) to $175 million (about 235 billion KRW), a reduction of over 60%. With TMGT's stock price surge that day, Trump’s wealth increased sharply, enabling him to liquidate shares to raise the bond money.
In principle, Trump cannot sell shares for six months after the listing. However, it is expected that he will seek ways to liquidate shares by placing his son and close associates on the seven-member TMGT board. If the board approves Trump’s stock sales, he could sell hundreds of millions of dollars worth of shares over three months.
Christy Marvin, founder of market research firm SPAC Insider, commented on Trump’s stock liquidation, saying, "No one really knows how this will proceed, but watching it unfold will definitely be interesting."
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