Former President Donald Trump’s Truth Social app is now live as of Feb. 20, Investor Place reports. Its SPAC merger with Digital World Acquisition now has an astounding $18.4 billion market capitalization on a pro forma basis. This is as a result of a huge spike in DWAC stock to $95.15 as of March 2.
If approved, once the merger closes later in 2022 with TMTG, the parent company of Truth Social, DWAC stock will have a huge market cap, though it assumes that the Truth app will be able to pick up tens of millions of users. This is based on the company’s original slide deck.
After warrants, which are now likely in the money, the number of shares could exceed 200 million. That would raise the pro forma market capitalization to slightly over $19 billion.
However, the SPAC and Trump’s media company assume their average revenue per user on the new Truth social media platform within three years will be twice as much as Twitter’s.
“That is probably a very heavy stretch,” according to Investor Place. “There is no way to know whether this assumption will be valid.”
Another concern is the potential for severe share dilution post-merger. Read more.
