Former President Trump's social media company began preparing for a legal loss like Thursday's conviction long before he had even been indicted.
Behind the scenes: In its October 2021 merger agreement with a blank-check company, Truth Social's parent company identified two "material disruptive events," one of which was a felony conviction.
- The other was if Trump announced his candidacy for public office.
- Both have now happened.
What the merger agreement says: "[Trump's] ownership and position in the company shall be structured in such a way as to eliminate the need for restructuring of ownership or changes in position were a Material Disruptive Event to occur."
- No further details were disclosed on that structure, and a TMTG spokesperson hasn't responded to a request for comment.
The big picture: Shares of Truth Social's parent company fell sharply in the aftermarket yesterday, when the verdicts were announced, but by this morning's open had largely recovered.
- Shares then fell around 5% in early Friday trading, but continue to trade at extraordinary multiples to the unprofitable company's paltry revenue.
Go deeper: Truth Social loses $328 million in the first quarter
