Placeholder while loading item actions
The company, which plans to merge with former President Donald Trump’s social media company, has received citations from a grand federal jury, a setback that could complicate Trump’s plans to bring his company to public markets.
The company, known as Digital World Acquisition Corp., disclosed the citations in a June 24 Securities and Exchange Commission filing and warned that “they could delay, materially impede or impede the consummation” of the agreement. If the combination is made, Trump’s business could have access to more than a billion dollars pledged by investors.
The grand jury is at least the third investigative body to scrutinize Trump’s special-purpose acquisition (SPAC) agreement, after the SEC and the Financial Industry Regulatory Authority opened its own investigations.
Digital World Acquisition did not immediately respond to a request for comment.
The Trump SPAC was flooded with cash shortly after launch, but the price of its shares has fallen since the app was released. It fell 9.6 percent Monday to close at $ 25.15; by comparison, it was trading above $ 97 in early March.
According to the filing, the grand jury requested some of the same documents that the SEC requested. They include information about communications “with or about several people” and information about a Miami-based investment company called Rocket One Capital. Also Monday, the company announced the resignation of a DWAC executive who is described as a Rocket One executive.
Rocket One representatives could not be reached immediately. The company’s website seems to visitors as lack of maintenance.
Trump had introduced Truth Social, his new social network, as a rival to the big tech companies, and granted him an indisputable space to offer his thoughts and build an alternative to what he sees as “the liberal media consortium.” In addition to the social network, Trump Media & Technology Group promoted plans for a subscription streaming service that covers news, entertainment, and podcasts.
The launch of the social network earlier this year was marked by big hiccups. The website remained completely inaccessible during the first days of its debut due to technical errors, a 13-hour interruption and a waiting list of 300,000 people, which raised questions about its viability. Since then, the app has seen its downloads plummet, losing investors, executives and attention.
An SPAC is a fictitious company that is created to make public a private company by merging with it. They are called “blank check” companies because investors can buy shares without knowing which business the SPAC will acquire.
Although SPACs in their current form have existed since the early 2000s, they have increased in popularity in recent years, attracting celebrities such as Shaquille O’Neal, Jay-Z and Trump. But they have also called for regulatory control, frustration for investors who suffered losses and a repudiation of the market.
The agreements had become an alternative way to reach public markets. But SPACs have been particularly hard hit in the midst of the recent market crash, as investors deviate from riskier bets and regulators have proposed new rules to improve disclosure requirements and investor protection.
An index that tracks SPAC performance, the De-SPAC index, has fallen more than 60 percent during the year, compared to the fall of the S&P 500 benchmark of approximately 19 percent.
DWAC has lost more than half of its value so far this year.
Before Wall Street merged with SPACs, investment vehicles aroused immense interest because they can save companies and investors time and money. Stakeholders can ignore the traditional initial public offering process and attack quickly, taking advantage of the dramatic changes in the rising market.
After the initial economic shock at the start of the pandemic, an investment frenzy erupted in the SPACs, which attracted hedge funds and retail investors fighting for the next money generator amid the financial chaos generated by the crisis. public health.