The social media app shall be developed by Trump Media and Technology Group (TMTG).
Rafael Henrique | LightRocket | Getty Images
Shares of Digital World Acquisition Corp. — the shell company looking for to take former President Donald Trump’s social media platform public — soared greater than 50% on Friday following the corporate’s announcement that it had settled fraud charges with the Securities and Exchange Commission for $18 million.
This surge brought DWAC’s stock to $20.08, still a far cry from its highs above $95 in March of last 12 months.
DWAC is a special purpose acquisition company, or SPAC, that announced plans to merge with Truth Social parent company Trump Media & Technology Group in October 2021. The merger has since faced quite a few delays.
DWAC’s SEC settlement dictates that the corporate must pay an $18 million civil penalty fee if it merges with TMTG and takes the corporate public. But when the merger doesn’t occur before the Jan. 1, 2025, deadline, and if DWAC returns investors’ money, the SEC has agreed to waive the penalty.
The SEC alleged improper merger discussions had taken place. It is illegitimate for SPACS to solicit specific merger targets ahead of an actual initial public offering filing.
The settlement also comes on the heels of U.S. government charging three Florida men for DWAC-related insider trading.
The corporate’s stock has previously seen surges according to news in regards to the former president, with shares rising, for example, after Trump’s 2024 presidential bid announcement and indictment.
However the DWAC settlement is the newest in a growing list of legal problems which have ensnared Trump and his businesses since he left the White House in 2021.
He’s currently facing state charges in Recent York that his company falsified business records. He was also indicted in federal court last month for allegedly mishandling classified documents. Trump has pleaded not guilty in each cases.
Authorities in Georgia are also investigating Trump, the frontrunner for the 2024 Republican nomination, over his attempts to overturn his loss within the 2020 presidential election.
DWAC and Trump’s team didn’t respond immediately to requests for comment.
