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shares Digital World Acquisition Company The company surged about 30% on Monday after an appeals court sharply reduced the bond former President Donald Trump must pay in a civil fraud case, and the company announced it would begin trading as DJT on Tuesday.
The appeals court reduced the bond amount from $454 million to $175 million and extended Trump’s Monday deadline for posting the bond by another 10 days.
The ruling comes after the shell company’s merger with a social media group owned by former President Donald Trump was approved.
Monday’s rise in DWAC was likely largely driven by news of bond reductions. Investors in the company initially worried that Trump might try to sell part of his majority stake to free up cash if he was required to issue more than $400 million in bonds.
With the bond reduced to $175 million, the likelihood that Trump will try to sell his stock or pressure the board to change the terms of the merger lock-up has plummeted.
DWAC shareholders voted Friday to approve a merger between the special purpose acquisition company (SPAC) and social media platform owner Trump Media & Technology Group truth society.
Shares of the combined company will begin public trading on Tuesday under the ticker symbol DJT, after Trump’s initials.
The company’s debut on the public markets could provide a financial boost to Trump, who is expected to own 80 million shares of the new company, worth about $3 billion or more.
Under the current terms of the deal, Trump is prohibited from selling shares in the company for at least six months.
However, the board could vote to allow Trump to sell shares early. The board is expected to include several people close to Trump, including his son, Donald Trump Jr., and Trump’s former trade representative, Robert Lighthizer.
A potential windfall from selling the stock could help pay Trump’s legal fees and damages verdicts in three separate cases, totaling more than $500 million.
Shares of DWAC rose on Monday after falling nearly 14% on Friday after DWAC shareholders signed a merger agreement. The stock has soared more than 150% this year, but is down about 20% since hitting a 52-week high on Jan. 23.
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