US regulators clear path for Trump’s Truth Social merger
The US Securities and Exchange Commission on Thursday cleared the way for blank-check acquisition company Digital World Acquisition Corp’s merger with Donald Trump’s media and technology company.
Digital World said a registration statement for its proposed merger with Trump Media & Technology Group (TMTG), the operator of social media platform Truth Social, was declared effective by the SEC.
The closing of the deal would be a major boost for Trump, who will hold a stake of about 58% in the newly formed company.
DWAC shares soared nearly 30% on Thursday morning, and were last trading up 20% at $52.16, having touched a session high of $56.30.
Digital World said it expected to announce the date of a special meeting of its stockholders to vote on the approval of the merger within two business days. Representatives for DWAC did not immediately respond to a request for comment.
The stock has surged more than 150% since 15 January, when Trump won the Iowa caucus in his push as a Republican nominee for this year’s presidential election.
TMTG’s founders launched the company as a way for Trump to connect with his followers after he was cut off from major social media platforms following the January 6 attack on the
US Capitol by his supporters.
Trump, who is frontrunner for the Republican party’s presidential nomination, has 6.61 million followers on Truth Social, compared to the more than 88 million followers he had on Twitter when the platform suspended him, and the 87.4 million followers he currently has on that platform.
Twitter, now called X, later reversed the suspension following its acquisition by Elon Musk.
Digital World has faced several challenges since its October 2021 deal with TMTG. It has been the target of investigations by the US Department of Justice and the SEC, ousted its chief executive and shook up its board.
Those investigations have contributed to the deal’s delay. In July last year, DWAC reached an $18m settlement with the SEC, which had charged DWAC with making material misrepresentations in filings to the SEC as part of DWAC’s initial public offering and proposed merger with TMTG.
The SEC found DWAC misled investors and the SEC by failing to disclose that it had formulated a plan to ac
quire and was pursuing the acquisition of TMTG before DWAC’s initial public offering, in violation of federal securities laws.
In August, Trump broke a pledge to stick exclusively with Truth Social, and posted on X his mugshot from his booking at Fulton county jail in Georgia. He has not posted on X since, using Truth Social as his primary platform to reach voters.