Donald Trump’s social media platform, Truth Social, receives a lifeline

Donald Trump’s social media platform, Truth Social, has received a crucial lifeline as Digital World Acquisition Corp., a special-purpose acquisition company (SPAC), agreed to extend its acquisition or merger deadline with Trump Media & Technology Group.

Shareholders of Digital World voted to push the merger deadline until September 8, 2024, reflecting the challenges faced by Digital World in finalising the acquisition. If the merger goes ahead, it would provide much-needed financial support to Trump Media, with $290 million to be released by Digital World and an additional $1 billion committed by private investors. This funding would help cover expenses such as staff salaries and lease payments.

However, Digital World’s agreement with Trump’s company has been plagued with issues. In November 2021, the Securities and Exchange Commission (SEC) requested documents from Digital World due to concerns about potential security rule violations. In July, the SEC settled with Digital World on fraud charges, revealing that the company had misled investors and the Commission by not disclosing its plan to acquire Trump Media before its initial public offering. Digital World agreed to a cease and desist order and an $18 million penalty if the merger is completed.

Why does this matter?

Digital World and Trump’s business are facing subpoenas in a federal criminal probe, with the Financial Industry Regulatory Authority also investigating potential violations of stock trading rules. These legal troubles further complicate the merger process and raise questions about possible misconduct. The extension of the merger deadline offers a lifeline for Truth Social, but the process remains uncertain due to legal issues and scrutiny.