Shares of an acquisition company linked to former President Donald Trump reportedly rose about 10 percent from Thursday to Friday morning, implying a $100 million score after he was indicted Thursday.
The indictment impacted the shares of SPAC (Digital World Acquisition Corp.) which has plans to merge with Trump’s technology group that owns Truth Social.
“Investors could be betting that criminal charges will bring attention to Truth Social,” Forbes reported:
The former president’s Trump Media and Technology Group, which owns Twitter knockoff Truth Social, has plans to merge with a SPAC called Digital World Acquisition Corp. Investors cannot directly buy shares of Trump’s company, which remains private, but they can buy stock in the publicly traded SPAC, which would give them a share of Trump’s business if the entities complete their merger.
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No one has a bigger stake in all of this than the former president. Securities and Exchange Commission [SEC] filings say Trump is in position to hold 73.3 million shares of the merged entity. When the markets closed Thursday night, with shares trading at $13.06, investors were suggesting they believed Trump’s stake was worth about $957 million. By Friday morning, with stock changing hands at $14.42, the market was implying Trump’s stake was worth about $1.057 billion.
If the excitement continues, Trump could benefit even more. According to the merger agreement, Trump and the other shareholders of his company will receive bonus shares if the price of the merged company lingers above $15 for a while. That would mean an estimated 12.8 million additional shares for Trump, which would be worth $192 million at $15 apiece.
Trump does not have access to the capital invested into SPAC yet. The merger is pending, and the SEC is still reviewing the potential deal.
Follow Wendell Husebø on Twitter @WendellHusebø. He is the author of Politics of Slave Morality.