IPO of media company TMTG aims to solve Trump's liquidity problems

Former US President Donald Trump, who is struggling with liquidity problems after being convicted of business fraud, is taking his media company TMTG public. The necessary merger with Trump's partner company Digital World Acquisition Corp (DWAC) was approved by its shareholders on Friday. Trump is himself the main shareholder of TMTG – according to estimates, the IPO could bring him more than three billion dollars. However, according to his lawyers, Trump cannot afford a security deposit of almost half a billion dollars that the court demanded by Monday.

The 77-year-old Trump founded the company Trump Media & Technology Group (TMTG) to set up his own online network Truth Social. In order to go public, TMTG is to merge with DWAC. The partner company serves as a kind of vehicle: it is a so-called Special Purpose Acquisition Company (Spac), in a sense an empty shell that is already traded on the stock exchange.

By merging with such a company, Trump's TMTG can go public on Wall Street, bypassing numerous requirements. The use of such stock exchange vehicles is quite common in the USA. However, in such deals, major shareholders like Trump must hold onto their equity for six months before they can sell it.

In a civil trial in New York, Trump and his sons Donald Junior and Eric were recently found guilty of having artificially inflated the assets of their real estate empire over the years in order to obtain favorable conditions from banks and insurance companies.

Trump was therefore sentenced in February to a fine of around $355 million plus interest, and his sons were each fined $4 million plus interest. In total, these penalties amount to approximately $464 million (€427 million). Trump has appealed the ruling. The deadline by which Trump must deposit the money with the judiciary or provide appropriate guarantees expires on Monday.

The US magazine Forbes estimates Trump's fortune at $2.6 billion. However, the majority of it is tied up in real estate – including hotels and golf courses – and is therefore not immediately available to him. The right-wing populist Trump wants to become US president again and is expected to run against the 81-year-old Democratic incumbent Joe Biden in the November election.