On December 6, Digital World Acquisition Corporation, which has the stock symbol DWAC, joined SPAC, which is merging with President Trump’s newly formed media company. Investor Presentation in an SEC Filing (Scroll to the bottom of the filing). One of the most important charts in this (Slide 5) shows estimates of how many shares may be outstanding if the merger is complete and the $1 billion in public equity in PIPE or private investment closes.
The reason this is so important is because there are currently 37.2 million shares outstanding, but they could increase from 193 to about 225 million, depending on the stock’s price and earnings outlook.
market cap will skyrocket
The closing price of DWAC on Thursday was $51.91. Using 37.2 million shares, it would value Trump’s TMTG or Trump Media & Technology Group at $1.9 billion.
However, using the 193 and 225 million share counts shown in the slide, DWAC’s market cap would increase by $10 to $11.7 billion, respectively.
Companies whose market cap is in ascending order of $10 to $11.7 billion include Levi Strauss, Suncorp, Invesco, Singapore Airlines, Lear, Alcoa, Hertz, Grubhub, DraftKings, Avis and American Airlines. Per Company MarketCap.com, And these companies, which generate hundreds of millions of dollars or billions of dollars in revenue, are huge organizations and have been around for several decades, which shows what it usually takes to achieve a $10 billion valuation.
Huge market cap with very little revenue
The investor presentation also includes a slide, the last slide, which estimates the number of users or customers of TRUTH Social and TMTG+, how much can be monetized for TRUTH Social and ARPU, or the average per user for both offerings Revenue. After this it shows how much total revenue will be generated from them. Note that TMTG+ is expected to generate the bulk of the revenue. There are two major TMTG+ assumptions:
- From 4 million users in 2023 to 40 million in 2026
- Charging an average of $5.56 per month in 2023 increased to $9 per month in 2026
Total revenue will start at $114 million in 2023, essentially the first year of revenue generation, and will increase to $3.7 billion in 2026, its fourth full year.
Note that while these estimates are compared to current, well-known companies, in other parts of the presentation, they are subject to major revisions and in my experience are more likely to be compared to the above. Also note that the beta version for Truth Social was supposed to be available in November, but until December 30th. The website was asking people to join the waiting list,
Share $50. settled around
After an initial rush of excitement about DWAC’s merger with Trump’s social media company, where shares hit a high of $175 on October 22, they settled for nearly three weeks as lows of $50. They have also increased from $45 on December 3, the day before the announcement of the PIPE deal, with a conversion price of $33.60.
If the shares could hang around $50 DWAC and therefore the value of Trump’s media company would be between $10 and about $12 billion, with no revenue.