The development of a social media app is underway by Trump Media and Technology Group (TMTG).
Rafael Henrique | LightRocket | Getty Images
Shares of Digital World Acquisition Corp. (DWAC) — the shell company aiming to make former President Donald Trump’s social media platform public — surged over 50% on Friday. This followed the company’s announcement that it had settled fraud charges with the Securities and Exchange Commission, agreeing to pay $18 million in penalties.
Despite the surge, DWAC’s stock is still far from its peak of above $95 in March of last year, now standing at $20.08.
DWAC is a special purpose acquisition company (SPAC) that declared its intention to merge with Truth Social parent company Trump Media & Technology Group in October 2021. The merger has faced several delays since then.
Under DWAC’s SEC settlement, the company must pay an $18 million civil penalty fee if it merges with TMTG and goes public. However, if the merger fails to occur by the deadline of January 1, 2025, and DWAC returns investor funds, the SEC will waive the penalty.
The SEC accused DWAC of engaging in improper merger discussions, which is illegal for SPACs to do before filing an initial public offering. This settlement comes in the wake of three Florida men being charged with DWAC-related insider trading by the U.S. government.
Previously, the company’s stock saw surges in response to news about the former president, such as Trump’s announcement of his 2024 presidential bid and his indictment.
However, the DWAC settlement is just one of the many legal issues that have entangled Trump and his businesses since his departure from the White House in 2021.
Currently, he is facing state charges in New York, accusing his company of falsifying business records. Additionally, he was indicted in federal court last month for allegedly mishandling classified documents. Trump has pleaded not guilty in both cases.
Furthermore, authorities in Georgia are investigating Trump, the leading contender for the 2024 Republican nomination, regarding his efforts to overturn the results of the 2020 presidential election.
Requests for comment from DWAC and Trump’s team have gone unanswered thus far.
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