Trump To Maintain Control Of Media Company If He Sells Majority, Goes To Jail Or Becomes President

Former President Donald Trump is the frontrunner to receive the Republican nomination for the 2024 presidential election.

However, his media company has faced numerous setbacks and could become a key focus for investors ahead of a potential sale, potential jail time and Election Day.

What Happened: A merger between Trump Media & Technology Group (TMTG) and Digital World Acquisition Corporation DWAC was announced back in October 2021.

Since then, the deal faced several setbacks and has yet to be approved. An extension for its vote was recently pushed back to Dec. 31, 2023.

News of the vote extension boosted shares of the stock, as did the announcement of a settlement with the U.S. Securities and Exchange Commission in July.

The stock has been highly volatile in 2023. Trump was indicted four times and has multiple court dates ahead, alongside a campaign.

Whether he chooses to sell most of the shares he owns if the company completes its merger, serves jail time or becomes president, Trump is likely to keep control and stay in charge at the media company that bears his name.

Related Link: Trump Will Still Run For President If Convicted, And Right Now That's Perfectly Legal 

What’s Next: If the merger between TMTG and DWAC is completed, Trump will own shares in the new company.

Axios reports that Trump can maintain control of the social media company, which owns the TRUTH Social platform, even if he sells most of his shares.

The report comes as the parent company created a new class of stock that will see Trump as the only holder. Trump will have 55% voting power of the new entity if he holds one of the newly issued higher class shares.

News of the higher class share that could protect Trump’s control of the company post-merger also comes as the SPAC deal included provisions related to a “material disruptive event,” as Benzinga previously reported.

“The company principal’s ownership and position in the company shall be structured in such a way as to eliminate the need for restructuring of ownership or changes in position were a material disruptive event to occur,” the filing reads.

The filing listed a material disruptive event to include “the company principal announced that he is running for a public office” or “the company principal is personally convicted of a felony criminal offense.”

Trump is already running for president, which covers the first material event. The former president also faces several federal charges, which could lead to time served in jail.

Filings previously listed a lock-up on shares of six months after the merger closes, or 150 days if the stock price is above $12. Potential earn-outs for executives come if DWAC shares hit $15, $20 and $30 levels.

The odds of Trump facing any jail time remain a big question, but have increased with the indictment. One thing is certain based on the SPAC merger provisions: If a deal is approved between DWAC and TMTG, Trump will be in control, whether in jail or not.

DWAC Price Action: DWAC shares are up 4% to $17.40 on Wednesday, versus a 52-week trading range of $12.34 to $31.29. Shares of the SPAC are down 43% in the last year and have fallen significantly from a peak of $175 in 2021. 

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