The public listing of former President Donald Trump’s social media company hit a new blow on Monday when a cash-rich shell company merged with Mr. Trump’s company. Disclosure in regulatory filings A federal grand jury in New York recently issued a subpoena to the company and its directors.
The grand jury subpoena was issued within the past week, submitted by Digital World Acquisition Corporation (SPAC), a special-purpose acquisition company that announced a merger with Trump Media & Technology Group in October. After the merger, Trump Media will take over the listing of Digital World and will be traded as a public company.
The Digital World disclosure is the first sign that a federal prosecutor in Manhattan has joined the scrutiny of the Digital World and Trump Media merger, which has been investigated by financial regulators for several months. In addition to the stock market listing, the investigation could further delay the completion of the merger, which will provide Mr. Trump’s company with up to $ 1.3 billion in capital.
The Securities and Exchange Commission and financial industry regulators began investigating within a few weeks of the announcement of the merger. According to a Digital World submission on Monday, the grand jury subpoena sought the same information that the SEC had already requested.
The federal grand jury also asked for “information about Rocket One Capital.” Filing did not reveal what information the grand jury wanted about Miami’s venture capital firm, Rocket One.
and Another filing, Digital World has announced that Bruce Garelick has resigned from the board of directors. Garelick is listed in the Digital World filing as Chief Strategy Officer of Rocket One.
Garelick did not immediately respond to the request for comment. The submission did not give a reason for his resignation.
The SEC’s investigation focuses on whether there was a serious debate between digital world leadership and Trump media before the SPAC was released last September, and those discussions are filing with regulatory agencies. Was not disclosed in. SPACs that raise funds publicly in the hope of finding potential mergers should not keep acquisition goals in mind when raising funds from investors.
Regulators also requested information about anomalous trading activity in Digital World securities prior to the announcement of the merger. Prior to the announcement of the merger, trading in Digital World Warrants increased significantly. This is a security that gives the owner the right to purchase shares at a specified price at a later date.
In response to the disclosure of the Digital World, Trump Media issued a statement stating that “the focus is on regaining the rights of Americans to free speech.” The company added, “We will encourage and cooperate with oversight to support the SEC’s important mission to protect private investors.”
Trump Media’s flagship product is Truth Social, a Twitter-like social media clone that Mr. Trump took to post messages, especially after a late start, especially among conservatives and other supporters of the former president. I started to gather supporters at. Mr. Trump was banished from Twitter in January 2021 after repeatedly posting messages alleging that the 2020 presidential election was stolen, and did not immediately condemn the attack on the Capitol on January 6.
Digital World’s share price, which closed at $ 27.82 last week, fell more than 10% in pre-market trading. Stock prices have fallen more than 70% since their peak in March, but are well above the listing price.
