Former President Donald Trump is making waves in the financial world once again with his social media venture, as shareholders in Digital World Acquisition Corp approved a merger on Friday, paving the way for Trump Media & Technology Group to go public. This move marks Trump’s return to the stock market nearly 30 years after his resort company’s tumultuous journey ended with delisting from the Nasdaq.
Trump Media & Technology Group’s merger with Digital World, a special-purpose acquisition company already trading on the Nasdaq, positions Truth Social, the parent company, to enter the public sphere with Trump as the majority owner. Current share prices hint at a potential windfall of $3 billion for the former president.
This isn’t Trump’s first foray into the public market. His previous venture, Trump Entertainment Resorts, embarked on an initial public offering in 1995, trading at $14 per share in a 10-million-share offering. The company owned various properties including the now-closed or sold Trump Plaza, Trump Marina, Trump Taj Mahal, and Trump Casino, all situated in Atlantic City and Gary, Indiana.
However, Trump Entertainment Resorts faced financial turbulence, recording losses ranging from $40 million to $66 million annually in the years following its IPO. This downward trend ultimately led to the company’s delisting from the Nasdaq in 2009 amidst a string of bankruptcies in 2004, 2009, and 2014.
Despite its struggles, Trump, who owned a significant portion of the company’s shares, received substantial compensation during his tenure. Billionaire investor Carl Icahn later took control of Trump Entertainment Resorts in 2014, transforming it into a wholly-owned subsidiary of Icahn Enterprises.
Fast forward to the present, Forbes estimates Trump’s net worth at $2.6 billion, leading to his removal from the Forbes 400 list in 2023. A significant portion of his net worth, $413 million, comprises cash and liquid assets, while his stake in the social media company is valued at an estimated $96 million.
However, Trump’s current financial challenges stem from legal troubles, including a $454 million bond he must pay in a civil fraud case. Additionally, he owes writer E. Jean Carroll $88.3 million in damages after being found liable for sexual abuse and defamation in separate suits.
Trump’s assertion of having $500 million in cash contradicts his attorneys’ claims of the impracticality of securing the full bond amount. Experts doubt that the projected $3 billion windfall from his media company’s public debut will aid in meeting the bond deadline, citing limitations on immediate liquidation of his stake and concerns about overvaluation.
Trump’s inability to sell shares for at least six months post-public offering adds another layer of complexity to his financial predicament. If he fails to pay the bond or obtain a stay on the payment, assets such as his Seven Springs estate and Trump National Golf Club Westchester could face seizure.
Reflecting on Trump’s financial history, his holdings were once burdened by $3.4 billion in debt years before Trump Entertainment Resorts’ IPO. Lenders imposed a strict monthly budget for personal and household expenses on Trump, underscoring the magnitude of his financial challenges.
Despite receiving substantial bonuses during the company’s decline, Trump Entertainment Resorts succumbed to bankruptcy in 2004, facing approximately $1.8 billion in debt. This turbulent journey serves as a cautionary tale amidst Trump’s latest venture into the public market.
In , as Trump prepares for Truth Social’s public debut, his past experiences with Trump Entertainment Resorts offer valuable lessons in navigating the complexities of the financial landscape. The road ahead presents both opportunities and challenges, shaping the narrative of Trump’s return to the stock market.
