Expensive lawsuits

Trump in financial trouble: Can an IPO help?

(Bild: APA/AFP/ANGELA WEISS)

Donald Trump urgently needs money. He has to post bail of 454 million dollars in a trial, further court proceedings and his presidential election campaign are likely to swallow up further huge sums. The IPO of his social network Truth Social comes at just the right time: it was made possible by a trick and could bring him billions.

To go public, the company founded by the ex-president, Trump Media & Technology Group (TMTG), is to merge with his partner company Digital World Acquisition Corp (DWAC). TMTG was founded for the establishment of Truth Social, Trump himself is the main shareholder.

Partner company as a shell
According to estimates, the IPO could bring him more than three billion dollars. This requires the merger with DWAC, which was approved by its shareholders on Friday. The partner company is a so-called Special Purpose Acquisition Company (Spac), an empty shell, so to speak, 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.

Trump after a hearing in Manhattan(Bild: APA/AFP/ANGELA WEISS)

Deadline expires soon
With the windfall that now beckons him, Trump could raise the sum of a good 454 million dollars (approx. 417 million euros) that he has to deposit as security in New York by next Monday as part of his fraud trial. This is because the US presidential candidate will only be able to appeal if he can present the money or provide security. Otherwise, the state of New York can seize his property - primarily valuable real estate.

The New York Attorney General's Office has already taken a first step in this direction. It filed a court judgment against Trump in Westchester County north of New York City. This marks the first step towards being able to seize and attach a golf course and a property that the 77-year-old owns there. Trump recently begged his fans about this.

Trump: "Have 500 million"
His lawyers recently stated that he would not be able to pay the dizzyingly high bail. It remains to be seen whether the IPO of Truth Social will bail him out in time. However, the ex-US president contradicted his own lawyers in his online service. He claimed to have "almost 500 million dollars in cash" on Friday. He wanted to use the money for his current presidential campaign, Trump wrote.

Whether the notoriously pompous Republican is telling the truth remains to be seen. In any case, he was sentenced to pay almost half a billion dollars because the court considered it proven that he had misrepresented his assets in order to obtain favorable loans.