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Donald Trump Becomes Richer Than Ever, Enters Bloomberg Billionaires List

Donald Trump’s financial concerns have eased slightly after he became richer than ever this week, at least on paper. According to American media, Bloomberg has included the Republican presidential candidate on its famous billionaires list for the first time, estimating his wealth at $6.5 billion. In fact, in just the last few days, the former U.S. president has become richer by four billion dollars.

‘Boost’ from the Court

The cause of such a jump is the approved merger between his company Trump Media & Social Group, which owns the social network Truth Social, and a ruling that saved Trump a significant amount of money. Recall that Truth Social is Trump’s ‘private’ social network that he established to promote his political messages in light of the ‘censorship’ on the then Twitter (before it was owned by Elon Musk). The merger approval with the SPAC (Special Purpose Acquisition Company) Digital World Acquisition Corp. (DWAC) was approved by shareholders last Friday.

Donald Trump owns about 80 million shares, or about 58 percent of Trump Media. With the closing price of DWAC shares on Monday at $49.95, Trump’s stake is worth four billion dollars on paper. DWAC’s stock jumped 35 percent on Monday after news that a New York court accepted Trump’s appeal and reduced the amount he must post as collateral for a $454 million fraud penalty.

Trump faced a payment of over $550 million that he had to post if he wanted to avoid a court seizure of his properties. However, the court decided that it was sufficient for him to post only $175 million. According to announcements, shares of the newly merged company will start trading today under the symbol DJT. For now, it is unclear how Trump’s wealth will move in the coming months, given that he cannot sell DWAC shares for six months, and the stock has had significant ups and downs so far.

What Does SPAC Do?

The volatility of the stock arises from the very structure of the company. Essentially, a SPAC is a company that is established solely for the purpose of merging with another company that wants to avoid the complicated process of going public. A SPAC has no revenues and does nothing, yet its shares are still traded on the stock market. Such companies have a limited lifespan, about a year, during which they must find a target for merging. Otherwise, the founders (who are officially called sponsors) lose all their money.

If a merger occurs, sponsors can increase their investment by up to ten times. This is not a unique Trump idea – such a model was very popular in the U.S. capital market until four years ago when there was ultra-cheap money from central banks. Trump opted for the listing of Truth Social through a SPAC since investment banks had been avoiding him after the rush of his supporters on the Capitol.

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