$3 Billion From Truth Social Merger Unlikely to Fix Trump's Money Trouble

Digital World Acquisition Corp. shareholders on Friday approved a merger involving former U.S. President Donald Trump's social networking platform—but a multibillion-dollar windfall from the deal isn't expected to help him with the $454 million bond he needs to post for a New York fraud case by Monday.

Trump's deal with the special purpose acquisition company (SPAC) was announced back in 2021 and finally got approval from the Securities and Exchange Commission last month. Thanks to the merger, Trump Media & Technology Group—whose primary product is Truth Social—could be trading on the stock market under the ticker symbol DJT next week.

Digital World had a $42.81 closing stock price on Thursday and Trump is set to own nearly 79 million shares, which works out to over $3 billion. However, a Wall Street provision known as a "lock-up" agreement will block Trump—the presumptive Republican presidential candidate for the November election—from swiftly ditching that stock to cover his mounting legal costs.

As The Associated Press detailed before the merger vote:

Investors under the lock-up deal cannot sell, lend, donate, or encumber their shares for six months after the close of the deal. Legal experts say "encumber" is a powerful word that could prevent Trump from using the stock as collateral to raise cash before six months have elapsed.

There are a few exceptions, such as by transferring stock to immediate family members. But in such cases, the recipients would also have to agree to abide by the lock-up agreement.

Experts warn that Trump selling a bunch of his Truth Social shares after the six-month mark could prove problematic.

"It's simply trading on Trump's name," Kristi Marvin, founder of the research firm SPACInsider, told Politico. "People aren't buying this because they like the fundamentals—they're buying this because they like Trump."

As a result of the civil fraud case launched by Democratic New York Attorney General Letitia James, Trump and his real estate company were hit with $355 million in fines last month. His adult sons, Donald Trump Jr. and Eric Trump, owe $4 million each, and longtime executive Allen Weisselberg was fined $1 million.

With interest, the former president owes $454 million and his sons owe $10 million. James gave Trump until March 25 to pay up. Attorneys for Trump, who is appealing, said in a Monday filing that it has been a "practical impossibility" for him to secure a bond. The attorney general is preparing to seize Trump's assets.

Trump's proceeds from the Truth Social merger could be "a ripe target for James to go after," MarketWatch noted Thursday. Financial attorney Mark Zauderer told the outlet that "bank accounts and debts owed, [including] the proceeds of a company sale, are far more simple to freeze than, say, Trump's stake in an LLC that owns a building."

As of Friday, Forbes estimated Trump's net worth at $2.6 billion, much of which is tied up in real estate. Earlier this month, a New York Times analysis found that he has about $350 million in cash. Trump claimed on Truth Social early Friday that he has "almost" $500 million in cash.

On top of the fraud fine, a New York City jury in January awarded E. Jean Carroll $83.3 million in a judgment against Trump for defaming the journalist after she accused him of raping her at a department store in the 1990s. Trump, who is also appealing this decision, posted a $91.6 million bond provided by an insurance company in early March.

Trump faces a pair of federal criminal cases—one for his handling of classified documents and another related to his attempt to overturn his 2020 loss to Democratic President Joe Biden, who is seeking reelection. He has also been indicted in a criminal election interference case in Georgia and a hush money case in New York.