Donald Trump (left) and a phone displaying his social media app, Truth Social.
Brandon Bell/Getty Images/Christoph Dernbach/picture alliance via Getty Images
- Digital World Acquisition stock jumped 12% on Wednesday after it reiterated its intent to merge with Donald Trump’s Truth Social.
- The stock had previously plunged 39% over Monday and Tuesday after the SPAC disclosed another SEC probe.
- The SEC probe seeks additional information about communications company insiders had with Truth Social and other acquisition targets.
Digital World Acquisition stock has seen wild swings in its stock price this week as the SPAC grapples with an expanded probe by the Securities and Exchange Commission.
Digital World disclosed to investors on Monday that the SEC is seeking additional information about communications company insiders had with Truth Social executives and other acquisition targets it may have been eyeing. Both the SEC and FINRA have been investigating the Digital World merger since late last year.
The stock plunged 39% over Monday and Tuesday following the disclosure, as investors question whether its deal to merge with Donald Trump’s Twitter competitor will come to fruition or ultimately be delayed. The deal between Digital World and Truth Social was first announced in October with an expectation that it would close in the second half of this year.
But Digital World’s stock was on the rebound on Wednesday, jumping as much as 12% after the company reiterated its intent to merge with Truth Social.
“The Digital World Acquisition team has been tirelessly working towards consummating its proposed business combination with Trump Media & Technology Group,” the company said in a Tuesday evening press release.
Digital World also said it “appreciates” the SEC’s task to protect investors and acknowledged that it is cooperating with the agency to provide additional information that will help the SEC complete its investigation.
While Digital World may appreciate the SEC, it likely doesn’t appreciate the risk the SEC’s investigation poses to the company’s ability to close on its deal with Truth Social. Digital World warned investors in its Monday disclosure that the SEC investigation could delay its proposed merger with the former president’s social media company.
Digital World Acquisition stock is down 42% year-to-date, and is off about 83% from its record high reached right after the merger was announced last October.
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