Trump app buyer is facing subpoenas

Company interested in social media business reveals court action

The company planning to buy Donald Trump’s new social media business has disclosed a federal grand jury investigation that it says could impede or even prevent its acquisition of the Truth Social app.

Shares of Digital World Acquisition Corp. dropped almost 10 percent Monday as the company revealed that it has received subpoenas from a grand jury in New York.

The Justice Department subpoenas follow an ongoing probe by the Securities and Exchange Commission into whether Digital World broke rules by having substantial talks about buying Trump’s company starting early last year before Digital World sold stock to the public for the first time in September, just weeks before it announced it would buy Trump’s company.

Trump’s social media venture launched in February as he seeks a new digital stage to rally his supporters and fight Big Tech limits on speech, a year after he was banned from Twitter, Facebook and Youtube.

The Trump Media & Technology Group — which operates the Truth Social app and was in the process of being acquired by Digital World — said in a statement that it will cooperate with “oversight that supports the SEC’S important mission of protecting retail investors.”

The new probe could make it more difficult for Trump to finance his social media company. The company last year got promises from dozens of investors to pump $1 billion into the company, but it can’t get the cash until the Digital World acquisition is completed.

Stock in Digital World rocketed to more than $100 in October after its deal to buy Trump’s company was announced. The stock closed at $25.16 Monday.

Digital World is a specialpurpose acquisition company, or SPAC, part of an investing phenomenon that exploded in popularity over the past two years.