US regulators investigate Trump SPAC deal to publicize new social media company

Regulators are asking questions about the deal to go public with Donald Trump’s new social media company, which has attracted both legions of fans of the former president and those looking to make a quick profit.

The company in partnership with Trump Media & Technology Group acknowledged the inquiries in a filing it filed with regulators on Monday. He also gave a financial forecast for the company, which hopes to compete with Twitter and other platforms that have banned Trump, as well as Netflix and other video streaming services.

Digital World Acquisition, which is often referred to by its trade symbol “DWAC”, said it was cooperating with “preliminary fact-finding investigations” of the Financial Industry Regulation Authority and the Securities and Exchange Commission.

Repot: Trump’s SPAC deal may have violated …


The Financial Industry Regulation Authority, or FINRA, called in late October and early November for a review of trading in DWAC shares ahead of the October 20 merger deal being announced. This ad sent the stock from $ 9.96 to $ 94.20 in just two days, as Trump supporters and quick-buck investors piled up. The shares have since fallen back to around $ 43.

The stock slipped $ 1.07, or 2.4%, to $ 43.90 during Monday afternoon trading.

In early November, the Securities and Exchange Commission requested documents relating to DWAC board meetings, trading policies and other things. According to DWAC, the SEC’s request stated that “the commission’s investigation does not mean that the SEC has concluded that someone has broken the law or that the SEC has a negative opinion of the DWAC or any person. or security “.

$ 1 billion in investments pledged

DWAC said over the weekend that it had pledged $ 1 billion in investment for the new business of the former chairman of an anonymous institutional investor group, and it filed a copy of the presentation used to introduce investors and analysts.

The presentation included forecasts that the company’s Truth Social service could have 81 million users by 2026, nearly 7 million more people than those who voted for Trump in the last US presidential election. .

In five years, Trump Media is expected to generate nearly $ 3.7 billion in revenue, according to the filing. That’s more than the annual revenue of retailer Restoration Hardware, RV maker Winnebago Industries and entertainment giant iHeart Media, which owns more than 800 radio stations.

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