Donald Trump’s media company has faced numerous challenges over the past two years. Despite its efforts to go public since October 2021, Trump Media and Technology Group (TMTG) and its right-wing Twitter clone, Truth Social, have encountered regulatory problems and procedural obstacles.
The $300 million merger between TMTG and Digital World Acquisition Corp. (DWAC), a shell corporation functioning as a SPAC, has been hindered by regulatory and procedural complications. The US Securities and Exchange Commission (SEC) recently resolved securities fraud charges against DWAC, clearing the path for the merger between the two companies. However, they requested additional time from shareholders to finalize the deal.
On September 5, DWAC shareholders approved a one-year extension to complete the merger, providing a vote of confidence to move forward. Nunes, the CEO of DWAC, expressed gratitude for the support and emphasized their commitment to merging according to a statement.
A Summer of Legal Challenges
Donald Trump, along with his media company, has faced a series of legal problems this summer. Trump is currently under investigation for various crimes, including falsifying business records, mishandling classified documents, and attempting to overturn the 2020 presidential election.
Meanwhile, Trump’s media company and DWAC have also encountered legal troubles. In June, three early investors in DWAC were arrested and charged with insider trading, resulting in $22 million in profits. Subsequently, in July, the SEC settled securities fraud charges with DWAC for engaging in merger talks with TMTG before going public, a violation of federal securities laws.
Gurbir Grewal, the director of enforcement at the SEC, highlighted the significance of these disclosure failures, particularly within the context of a SPAC. DWAC could face an $18 million fine if the merger with TMTG is successfully completed.
Truth Social: Trump’s Meme Stock
With only 2 million active users, Truth Social is more a platform for Donald Trump’s cult of personality than a thriving social media business. The platform was created following Trump’s ban from Twitter due to his role in inciting violence at the US Capitol in January 2021. Although Trump recently shared his mug shot on Twitter, he has largely ignored his former platform of choice.
Interestingly, DWAC has gained attention as a meme stock among retail traders looking to capitalize on Trump’s personal brand. The new merged firm, despite facing multiple obstacles, could be seen as a representation of Trump’s influence and controversy rather than a conventional business.
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