What is Trump Media really worth? Depends who you are

Trading in Digital World itself has been volatile as investors weigh the criminal case against Trump, the removal of its chief executive and chairman, and warnings of big losses in addition to probes by regulators. The SPAC has slumped 72 per cent over the past year, while warrants tied to the blank cheque, which would be worthless if the deal fails to be completed, have dropped 77 per cent — wiping out millions for investors.

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Still, Digital World trades at a 28 per cent premium to the cash it holds, making it the best performing special-purpose acquisition company on the market. That means the $US13.31 share price implies a valuation greater than $US1 billion for Trump Media, using the $US875 million enterprise value the pair assigned when the deal was struck in 2021, according to calculations done by Bloomberg News.

Digital World has until September 8 to complete the merger after struggling to get retail investors to vote for an extension, forcing it to postpone the meeting more than five times. If the deal isn’t completed by the deadline, the SPAC would be forced to shutter and return the roughly $US10.41 a share to stockholders, resulting in big losses for investors who paid a premium for a shot at the SPAC and wiping out warrant holders.

Shares have slumped due to “the higher than usual probability that the deal will fail because of some challenges specifically related to DWAC,” said Usha Rodrigues, a professor of corporate law at the University of Georgia School of Law, referencing the investigations. That said, “there’s a major discrepancy between the market valuation” and what Trump’s disclosures show.