Shares of Digital World Acquisition Corp. (DWAC), the special purpose acquisition company (SPAC) seeking to take former President Donald Trump’s social media platform public, surged by over 50% on Friday. This significant increase came after the company announced that it had settled fraud charges with the Securities and Exchange Commission (SEC) for a sum of $18 million. Despite the surge, DWAC’s stock price of $20.08 is still considerably lower than its peak above $95 in March of the previous year.
SEC Settlement Details and Implications
The settlement between DWAC and the SEC stipulates that if DWAC merges with Truth Social parent company Trump Media & Technology Group (TMTG) and goes public, the company must pay an $18 million civil penalty fee. However, if the merger fails to occur before January 1, 2025, and DWAC returns investors’ money, the SEC has agreed to waive the penalty. The SEC had alleged that improper merger discussions had taken place, which is illegal for SPACs to do before filing an actual initial public offering.
Legal Troubles Surrounding Trump and DWAC
The settlement with the SEC is the latest addition to a growing list of legal problems that have affected former President Donald Trump and his businesses since leaving the White House in 2021. Trump currently faces state charges in New York for the alleged falsification of business records by his company. Additionally, he was recently indicted in federal court for the alleged mishandling of classified documents. Trump has pleaded not guilty in both cases. Authorities in Georgia are also investigating Trump regarding his attempts to overturn his loss in the 2020 presidential election.
The surge in DWAC’s stock price has often occurred in response to news related to the former president. For instance, shares rose after Trump’s announcement of a potential presidential bid in 2024 and following his indictment. However, the settlement with the SEC signifies another obstacle in the path of the long-awaited merger between DWAC and TMTG.
As of now, DWAC and Trump’s team have not provided any immediate comments in response to requests for further information.
Overall, the settlement between DWAC and the SEC has had a significant impact on the company’s stock price. While the surge in share value is notable, it remains well below previous highs. The legal troubles surrounding Trump and his businesses continue to unfold, with the SEC settlement being the most recent development. The outcome of the ongoing investigations and legal proceedings will undoubtedly shape the future trajectory of both DWAC and Trump’s endeavors.
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