Donald Trump remains in the midst of a cash crunch, with the former president facing multiple legal judgments totaling more than $500 million. But his money troubles may be relatively short-lived, thanks to the merger of Trump Media & Technology Group and Digital World Acquisition Corporation (DWAC). Shares in the new company began trading Tuesday under the ticker symbol DJT, and the deal is expected to be worth around $3 billion to Trump.
The caveats are legion: Trump would need permission from the new company’s board to sell the shares to public investors in the next six months or to pledge them as collateral, whether to pay his civil fraud judgment or to run his campaign for president. Any waiver of those rules from that board — stocked with his family and political allies — may lead investors to dump their shares to get ahead of the sale, knocking the price down.
As considerable as investors’ risks are, however, the risk facing the country is even greater.
Though the new company’s stock opened Tuesday at more than $70 a share, Truth Social alone lost millions a month last year. And the last time a Trump company went public — with the ticker symbol DJT, no less — Trump Hotels and Casino Resorts lost more than $1 billion and went bankrupt. There’s little reason to think that this deal will end well for anyone other than for Trump.
As considerable as investors’ risks are, however, the risk facing the country is even greater. On top of the multiple civil judgments and criminal cases still pending against him, Trump’s third presidential run already threatened to bring back the legion of conflicts of interest surrounding his real estate business. Now, add to that a social media company.
Truth Social is nowhere near as big as X and Facebook, but the 2024 election will surely drive up traffic on the site. And should Trump win, Truth Social will become the principal communication vehicle of the most powerful person in the world. Furthermore, a President Trump would once again control the Federal Communications Commission, which regulates social media. As he reminded us during his past presidency, the federal financial conflict of interest statute does not apply to the president. Truth Social’s larger competitors such as X and Meta will learn to work with Trump — to his advantage of course — or suffer the wrath of a his new administration.
Another platform, TikTok, is already under immense pressure from Congress because of its Chinese ownership. Sale to an American investor is apparently the sought-after solution, and — surprise, surprise — former Trump Treasury Secretary Steve Mnuchin is among those waiting in the wings to close a TikTok deal. Large swaths of social media, if not the entire industry, could soon be controlled by Trump or his billionaire supporters. While the dollar may be Trump’s top priority, for the rest of us, this isn’t just about money. With many Americans getting their news from social media, it’s about our political future. Backed by the power of the presidency, the Truth Social deal could be yet one more step in the consolidation of American social media in the hands of a few men who will have an outsize influence over the American electorate for decades to come. The FCC, of course, is supposed to prevent such consolidation of power in media. But with Trump in the White House, any FCC commissioner who dares try to do their job will likely find the path blocked by the White House. And the Supreme Court, increasingly enamored of a “unitary executive” theory of the presidency, could tell Trump that he can do just that. History has shown that Trump is about as good at respecting democracy as he is at respecting the interests of his investors. Furthermore, the justices, in recent oral arguments in Murthy v. Missouri, suggested they will likely continue allowing government officials to apply considerable soft pressure on social media companies to moderate content, without running afoul of the First Amendment. Americans who had few qualms about the Biden administration’s efforts to persuade social media companies to stop the spread of disinformation about Covid may have second thoughts about federal interaction with social media companies if Trump becomes president again. For now, there is nothing Americans can do about the Truth Social merger transaction. What we can do is elect a president committed to democracy. History has shown that Trump is about as good at respecting democracy as he is at respecting the interests of his investors. For those who vote for him and those who invest with him, the result may be pretty much the same.
Richard W. Painter
Richard W. Painter was the chief White House ethics lawyer from 2005 to 2007 under President George W. Bush. He is the S. Walter Richey Professor of Corporate Law at the University of Minnesota and is a graduate of Harvard College and Yale Law School. 
