It’s been a long two years for Donald Trump’s media company.
Trump Media and Technology Group (TMTG), which runs the right-wing Twitter clone Truth Social, has been trying to go public since October 2021.
The firm’s $300 million merger with Digital World Acquisition Corp. (DWAC), a shell corporation structured as a SPAC, has been delayed by a litany of regulatory problems and constant procedural hurdles.
In July, the US Securities and Exchange Commission (SEC) settled securities fraud charges with DWAC, paving the way for the two companies to actually combine. DWAC, a blank-check company the sole purpose of which is to merge with another company, is run by Trump ally and former Republican congressman Devin Nunes.
But staring down a Sept. 8 deadline, the turnaround was too soon to be feasible and the two companies asked shareholders for more time to combine. Yesterday (Sept. 5), DWAC shareholders—27 million of them—voted in favor of giving the shell corporation another full year to get the deal done.
“With this vote of confidence from DWAC shareholders, we will proceed as quickly as possible to complete our merger,” Nunes said in a statement announcing the results of the vote.
A summer of charges for Trump Media
It’s been a summer of legal woes for Donald Trump, who is facing a litany of criminal indictments for falsifying business records, mishandling classified documents, and attempting to overturn the 2020 presidential election—which he lost to Joe Biden.
But Trump’s media company and its merger partner have also been plagued by legal woes.
In June, federal prosecutors arrested and charged three early investors in DWAC with insider trading, which netted them a combined $22 million in profits.
Just weeks later, in late July, the SEC announced that it had settled securities fraud charges with DWAC for holding merger talks with TMTG before it ever went public itself. That violated federal securities laws, which prohibit blank-check corporations from going public if they’ve already arranged a deal to merge.
“DWAC failed to disclose its discussions with TMTG and failed to disclose a material conflict of interest of its CEO and Chairman,” US Securities and Exchange Commission enforcement director Gurbir Grewal said in a press release announcing the charges. “In the context of a SPAC—a ‘blank-check’ entity without business operations—these disclosure failures are particularly problematic because investors focus on factors such as the SPAC’s management team and potential merger targets when making financial decisions.”
As a result, DWAC will be fined $18 million if its deal with TMTG actually closes.
Truth Social will be Trump’s meme stock
Counting only about 2 million active users, Truth Social is not as much a viable social media business as a vehicle for Donald Trump’s cult of personality.
The platform was born out of Trump’s exile from Twitter. He was banned from the platform for inciting violence at the US Capitol on January 6, 2021, and was only welcomed back when Elon Musk bought the company for $44 billion last year.
Still, Trump has almost entirely ignored his old platform of choice, breaking his Twitter silence only recently to post his mug shot.
Through the years, DWAC has become a meme stock—a popular, and volatile, investment among retail traders hoping to make some money on Trump’s personal brand. Perhaps that’s how the new combined firm—which has scaled nearly every barrier preventing it from actualizing as a public company—should be understood. Not a real business, but a stock-market stand-in for one of the most influential and controversial men on the planet.