The SEC's Investigation into Truth Social Has Grown
The government has broadened the scope of its investigation into the proposed merger between Donald Trump's Truth Social and the SPAC, preparing to introduce it to the public.
In a filing with the SEC, Digital World Acquisition Corp. (DWAC) stated that regulators in the securities industry have requested additional materials and information related to the proposed transaction. It has been reported that law enforcement is looking at "communications regarding and due diligence of possible targets other than Trump's company."
Although the announcement of the probe into the merger had been made previously, this is the most recent indication that the authorities are intensifying their examination. The investigation appears to be centered on determining whether or not the two parties engaged in illicit negotiations before the release of DWAC's findings to the public.
DWAC stated that the "team has been relentlessly working toward consummating its proposed business" and that it intends to "give Digital World investors, both large and small, the chance to participate in the process of the Business Combination." Investors may consider the filing as a positive sign that the merger will go through. Many investors may simply be "buying the dip" at this time.
Trump Media & Technology Group (TMTG) is the parent company of Truth Social, an alternative social media network that is backed by former President Donald Trump. DWAC is the special purpose acquisition company (SPAC) that is aiming to merge with TMTG.
As soon as it was announced that Digital World would be bringing TMTG public, the business's shares rocketed up due to the widespread idea that Trump's big following and their need for alternatives to conventional social media might make the new company a successful venture.
Since then, however, the possibility of the previously-planned SPAC merger being successfully completed has been cast into doubt.
A number of regulatory agencies have asked for information connected to it, and the Securities and Exchange Commission (SEC) is the agency that most recently extended its investigation.
In a regulatory filing that was submitted on Tuesday, Digital World stated that the SEC is in the process of subpoenaing "documents [from DWAC] and information with respect to, among other things, conversations regarding and due diligence of possible targets other than TMTG."
When it was announced in October of last year that the special purpose acquisition firm DWAC would be taking Truth Social into public markets, the stock of DWAC skyrocketed, gaining more than 400 percent in a single day. DWAC began trading in September.
The company stated in the filing that any outcome of the inquiry might result in the imposition of severe penalties, injunctions, limitations on the conduct of Digital World's business, damage to the company's reputation, and other measures against Digital World.
Because of his arrangement with DWAC, Trump now has almost unrestricted authority within the corporation. In a prior filing, it was stated that no personal or political behavior may be considered terms of a breach of the agreement, even if the conduct in question was "dishonest, illegal, immoral, or unethical." Trump also has the right to elect who sits on the board of directors. He will have the potential to prevent matters that would ordinarily require approval from the firm's stockholders, such as the corporation's acquisition.
Previously, when speaking with investors, Truth Social projected that it will have 16 million subscribers by the end of 2022. Since its overall user base is now estimated to be between 1.5 million and 2 million according to a variety of media publications, the website will have a great deal of work to do in order to meet these initial expectations.
Please be advised that World Opportunity Investor and Strategic Investment affiliated newsletters to Wall Street Rebel are on record that DWAC is one of the biggest scams on Wall Street and having made a number of successful trades shorting Digital World Acquisition Corp. in the past couple of months.
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