Topline
Former President Donald Trump’s social media company will go public after shareholders in Digital World Acquisition Corp approved a merger Friday, marking Trump’s return to the stock market nearly 30 years after Trump’s resort company went public—and experienced years of bankruptcies before it was eventually delisted from the Nasdaq.
Trump's resort and casino company went public in 1995. (Photo by Scott Olson/Getty Images)
Key Facts
Trump Media & Technology Group’s merger with Digital World, a special-purpose acquisition company that already trades on the Nasdaq, will allow the Truth Social parent company to go public with Trump as the majority owner, potentially netting the former president a $3 billion windfall based on current share prices.
The company’s public debut will mark the second Trump-owned company to do so, following Trump Entertainment Resorts’ initial public offering in 1995, when it began trading at $14 per share in a 10-million-share offering, according to the New York Times.
Trump Entertainment Resorts owned several Trump properties including the Atlantic City-based Trump Plaza, Trump Marina and Trump Taj Mahal, as well as the Trump Casino in Gary, Indiana, all of which are closed or have been sold to other companies.
A week after going public, Trump Entertainment Resorts used some of the nearly $300 million it raised to resolve many of Trump’s personal debts, according to the Times—after Trump faced mounting debt issues and a turbulent Atlantic City casino market in the preceding five years.
The new company recorded losses ranging between $40 million and $66 million in each of the three years following its IPO, the Times reported, marking a trend that would continue and lead to the company’s 2009 delisting from the Nasdaq amid one of a series of bankruptcies in 2004, 2009 and 2014, according to the Washington Post.
Trump, who owned 40% of the company’s shares at the time of its debut, received more than $44 million in compensation during his time at the company, the Post reported.
Billionaire investor Carl Icahn agreed to buy most of Trump Entertainment Resorts’ bank debt in 2009, took control of the company in 2014 and later helped it become a wholly owned subsidiary of Icahn Enterprises.
Forbes Valuation
We estimate Trump’s net worth at $2.6 billion, a figure that resulted in the former president being removed in 2023 from the Forbes 400, which lists the U.S.’s 400 wealthiest billionaires. Only $413 million of Trump’s net worth is made up of cash and liquid assets. Trump’s stake in his social media company is worth an estimated $96 million.
Tangent
Trump’s current financial troubles now stem from his legal problems, as the businessman has been tasked with paying a $454 million bond by next week in the civil fraud case against him. He also owes writer E. Jean Carroll $88.3 million after he was found civilly liable for sexual abuse and defamation in two separate suits. Trump’s attorneys have told a state appeals court that securing a bond for the full amount is a “practical impossibility” and asked the court to pause the judgment while the case is appealed. However, in a Truth Social post conflicting with his attorneys’, the former president said Friday he personally has $500 million in cash, adding he plans to use “a substantial amount” of the funds for his presidential campaign.
What To Watch For
Trump’s $3 billion windfall after his media company goes public—based on DWAC’s share price—is unlikely to help him with the deadline to pay the $454 million bond, according to experts, who have noted his inability to liquidate his stake immediately and the possibility that lenders could see it as overvalued. Trump will be prohibited from selling shares in the media company for at least six months, though it’s possible the company board could waive the restrictions if he requests it. If Trump doesn’t pay the bond for his civil fraud judgment or secure a stay on the payment, he may have assets including his Seven Springs estate and the Trump National Golf Club Westchester seized.
Key Background
Years prior to Trump Entertainment Resorts’ IPO, the debt on the former president’s holdings totaled $3.4 billion, according to the Times, which reported Trump’s lenders put him on a $450,000-a-month budget for personal and household expenses. As Trump Entertainment Resorts declined following its IPO, the company continued benefiting Trump’s personal finances. He got a $5 million bonus in 1996, the same year the company stock tanked 70%, the Wall Street Journal reported. Trump’s company faced about $1.8 billion in debt ahead of its 2004 bankruptcy, according to the Washington Post.
Further Reading
As its stock collapsed, Trump’s firm gave him huge bonuses and paid for his jet (Washington Post)
