meme actions | Donald Trump: Trump’s tech SPAC could bring him billions with memes stockpile frenzy

Donald Trump’s declining fortune is suddenly about to receive a massive boost from the memes stock mania.

News on Wednesday night that the former president’s fledgling media company, Trump Media & Technology Group, is considering going public through a specialist acquisition company caused a frenzy among retail investors, even with few details released. . The stock gain raised the implied value of the new company to over $ 8.2 billion.

Based on figures from press releases and documents filed with the Securities and Exchange Commission, it appears Trump will own more than 50% of the combined company. At his current value, that would make him the richest he has ever been, up from his estimated net worth of $ 2.5 billion, according to the Bloomberg Billionaires Index.

In the roller coaster world of Reddit-fueled commerce and the awe-inspiring PSPC hype, these gains are hardly firm. But the money wagered on a media conglomerate Trump marks a sharp turnaround for a post-presidency that has not been kind to the billionaire’s business empire.

His Washington hotel, which first hit the market in 2019, is still for sale, while the downtown Manhattan flagship tower that bears his name has more and more vacancies. This summer, the CFO of the Trump Organization was charged with tax evasion. Trump’s net worth has declined by around $ 500 million since entering the White House, with the pandemic and fallout from the January Capitol Riot dealing additional blows to his business interests.

Now comes the arrival of social media that Trump, the poll leader for the GOP presidential nomination in 2024, has been teasing for some time. There are several reasons to be skeptical about the assessment. It will be months before the new company publicly releases its first product, a social media platform called Truth Social. And there are already technical problems. On Thursday, the Truth Social page was hacked to make it appear that Trump shared a photo of a pig defecating.

It’s also unclear how Trump plans to build a Twitter-wide social media platform over the next few months, let alone a streaming service, which is the next phase of Trump Media’s plans. according to the press release announcing the company. This statement was light on the numbers, even by PSPC standards.

“We don’t have financial data. We don’t have a business plan. We don’t know how they arrived at the assessment. We don’t have any information, ”said Kristi Marvin, managing director of research firm SPAC Insider. “This is the fundamental problem.

Representatives for Trump and Trump Media did not respond to requests for comment.

The company has ambitious plans that also include a potential “technology stack” to compete with Inc.’s AWS and Google Cloud, among others, according to a presentation on the Trump Media website. Right now, the Digital World board is light on members with media experience. Its CEO, Patrick Orlando, is a former Deutsche Bank AG derivatives trader who co-founded a sugar trading company and started a banking company, Benessere Capital, before more recently adopting PSPC.

So far, retail investors have little concern. Shares of Digital World Acquisition Corp., the front company merging with Trump’s new venture to go public, closed at $ 94.20 on Friday, from $ 9.96 before the deal was announced on Wednesday. This is also an increase of over 800% over the offering price of $ 10 that is typically used in a PSPC merger deal.

The press release said the new company would have an initial enterprise value of $ 875 million. Assuming this calculation uses an offer price of $ 10 per share and the $ 293 million that Digital World has in trust, the owners of PSPC will get about 42% of the combined company after taking into account the shares that the sponsor receives if an agreement is reached.

That leaves 58% for Trump and all the partners he has in Trump Media. This stake is worth nearly $ 4.8 billion, based on Digital World’s latest prize. The entire company is valued by the market at around $ 8.2 billion, compared to the nearly $ 50 billion valuation of Twitter Inc.’s shares.

With the valuation of the new media company eclipsing the $ 875 million enterprise value agreed to by Trump, he might have been able to negotiate a softer deal. The terms of the deal will need to be more fully disclosed and could still change before a deal is voted on by shareholders, an event that is likely months away.

Commercial strains

Most of Trump’s current wealth is tied to the Trump Organization, a sprawling real estate company that has been hit by the pandemic and legal issues. There is also at least $ 590 million in outstanding debt over the next four years related to the company’s properties, more than half of which is personally guaranteed by Trump.

In April, the company scored a victory when its partner in two skyscrapers, Vornado Realty Trust, refinanced debt related to its San Francisco tower, earning its owners $ 617 million. The Trump Organization also appears to be moving closer to selling the Trump International Hotel in Washington, which was a hot spot for political allies, lobbyists and conservative media figures during his administration.

“We are one of the least leveraged real estate companies in the country relative to our assets,” Trump’s son Eric Trump said at the time of the Vornado deal. On paper, he and his brother Donald Trump Jr. led the Trump Organization. CFO Allen Weisselberg stepped down from his various roles after his indictment. The company was also charged with 15 counts in New York City.

Trump did not signal that he would return to the Trump Organization. He’s now focused on dominating the Republican Party and his new media project, which would give him a way to connect with supporters and raise money after being banned from Facebook and Twitter. This would be key if he chooses to run for a second term in 2024.

When Trump first ran for president, he claimed to have a fortune of $ 10 billion. Now the frenzy of retail may bring it a bit closer to the goal.

About Nicole Harmon

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