Trump-Linked SPAC stock slips after Senator Warren calls for SEC investigation

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""SPAC Stock"" – Google News

Top line

The stock of the special purpose vehicle, which will fund former President Donald Trump’s proposed social media platform, Truth Social, fell Thursday after it was reported that Senator Elizabeth Warren (D-Mass.) Wrote a letter to the Securities and Exchange Commission had sent calls for an investigation into whether Trump and the company committed securities fraud.

Then President Donald Trump sits with his arms crossed at the round table in the east during a discussion … [+] White House room on July 7, 2020.

JIM WATSON / AAFP via Getty Images

Important facts

The shares of Digital World Acquisition Corp. (DWAC) was trading at $ 55.60 on Thursday afternoon, down nearly 5% from its closing price on Wednesday and about 6.6% from an intraday high of $ 59.54 on Thursday morning, prior to the news of the letter became.

DWAC plans to merge with a company called Trump Media and Technology Group, with the former president serving as chairman of the resulting company.

Warren cited media reports that representatives from DWAC and Trump’s new company were discussing a merger in May – they may have committed securities violations by not disclosing those talks, Warren alleged.

The Trump Media and Technology Group did not respond to a request for comment from Forbes.

Crucial quote

“The reports on DWAC and Trump Media and Technology Group seem like a textbook example of a SPAC misleading shareholders and the public about vital information,” Warren said. The Senator has been an outspoken critic of SPACs in the past, which aim to raise money from investors before merging with existing companies.

Key background

DWAC’s share price skyrocketed last month after the merger announcement, skyrocketing 550% from about $ 10 over the next week, hitting a high of $ 175 on October 22, the height of the buzz is now sitting on Losses.

What to look out for

Truth Social is expected to release a beta version this month ahead of full rollout in early 2022. The site bills itself as a “rival of the liberal media consortium,” and Trump said he plans to use it to regain his social media presence after his supporters attacked the US Capitol on Jan. 6 from banned from all major platforms. Trump Media and Technology Group also plans to start a streaming service with “non-wake” programs.

further reading

Trump’s $ 300 million SPAC deal may have circumvented securities laws (New York Times)

SPAC stakes behind Trump Social Media Company soar 400% (Forbes)

Trump’s SPAC kidding on its own supporters while enriching Wall Street elites (Forbes)

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