Truth Social merger partner’s stock drops after Trump hails Elon Musk’s Twitter deal
The TRUTH Social website is seen on a mobile device with an image of former US President Donald Trump in the background in this photo illustration in Warsaw, Poland, February 23, 2022.
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Shares of Digital World Acquisition Corp.the blank check company set to take public Trump Media and Technology Group and its Truth Social platform, slipped on Friday as Elon Musk took over the reins of Twitter.
Musk previously said he would reinstate Trump’s Twitter account, which was banned after the Jan. 6, 2021 Capitol riot. The former president had about 88 million Twitter followers, but he doesn’t have one. raised only 4.37 million on Truth Social.
DWAC shares are down around 68% so far this year, trading around $16. Its 52-week high was $101.87.
Barring legal intervention, Trump Media currently has until December to finalize the merger with DWAC and make it public. A shareholder vote is scheduled for Thursday to extend that deadline to September 2023, but the last four such votes have failed to gain the necessary 65% shareholder approval.
Trump posted on Truth Social Friday praising Musk’s acquisition, but also touting his own platform.
“TRUTH SOCIAL has become a bit of a phenomenon. Last week it had more numbers than all other platforms including TikTok, Twitter, Facebook and others,” Trump wrote. “I’m very happy that Twitter is now in good hands and no longer run by crazies and fanatics from the radical left.”
DWAC did not immediately respond to a request for comment.
The platform of the ex-president still has to overcome certain legal and financial obstacles.
A Securities and Exchange Commission whistleblower complaint from a former Truth Social executive, William Wilkerson, alleged that Trump Media and DWAC discussed a merger prior to DWAC’s announcement, which would violate privacy laws. securities. The merger is currently the subject of a federal criminal investigation.
DWAC has previously warned that a failure to extend the deal could lead to the liquidation of SPAC, and Trump has warned that he may not need the hundreds of millions from the deal.
“If they don’t come with the funding, I’ll keep it private,” Trump told supporters at an early October rally in Michigan. “Easy to have in private.”
The ex-president raised a fair share of private funding for Trump Media and Technology Group.
The high profile investments, first reported by Reuters on Friday, include $9.8 million from Karl Pfluger, an oil executive and brother of Trump-endorsed U.S. Representative August Pfluger, R-Texas.
A spokesman for August Pfluger told Reuters he had no personal investment in Trump Media & Technology Group, saying, “He got President Trump’s endorsement long before Truth Social was founded. “
Other investors include Patrick Walsh, a former partner of Trump Media chief financial officer Philip Juhan, who has a $6.2 million stake. Roy Bailey, who was the chairman of Trump’s 2020 re-election campaign co-funder, donated $200,000 to Trump Media. George Glass, Trump’s ambassador to Portugal, donated $500,000. Texas fruitcake tycoon Bob McNutt invested $100,000.
About $1 billion more in private investment was due to go through DWAC when the merger was completed, but a key deadline passed in September allowing investors to withdraw their stake. Since then, at least $138 million in funding has been withdrawn.