Digital World Acquisition Corp. stock, the special purpose acquisition company aiming to take former President Donald Trump's tech and social-media platform public, soared Friday after a grand jury voted Thursday to indict Trump.
The grand jury voted to indict Trump Thursday after hearing evidence the former president allegedly paid hush-money to a porn star during the 2016 election. This marks the first time in U.S. history a former president faces criminal charges. Trump is now expected to come to New York to face the charges.
Trump, one of two Republican candidates officially running for president in 2024, in a Truth Social statement Thursday called the indictment "political persecution" and "election interference."
Meanwhile, DWAC stock surged 12% Friday before the market opened. During market action, shares jumped 7.7% to 14.07. DWAC edged down 0.23% to 13.06 Thursday. As of Thursday's close, DWAC shed 11.7% in March.
DWAC plans to take Trump Media and Technology Group (TMTG) public in the sort of reverse merger that was popular several years ago. Trump Media is the parent of the conservative social-media platform Truth Social.
The future of DWAC and its plans are tightly bound up in the value of the Trump brand, and Trump's current status as the top Republican candidate heading toward the 2024 presidential election.
"If President Trump becomes less popular or there are further controversies that damage his credibility or the desire of people to use a platform associated with him, and from which he will derive financial benefit, TMTG's results of operations, as well as the outcome of the proposed business combination, could be adversely affected," DWAC wrote in an August 2o22 federal filing.
Trump took to Truth Social Thursday and Friday calling the indictment "an attack on our country the likes of which has never been seen before."
The Case Against Trump
The grand jury has been hearing evidence about the former president's role in a high money payout to porn star Stormy Daniels to keep her story of an affair with Trump out of the public during the 2016 presidential election cycle.
Trump's attorney Michael Cohen made the $130,000 payment to Daniels. Trump allegedly reimbursed Cohen and falsely recorded the payment as "legal expenses" in his company's internal records, according to the New York Times.
Trump has denied any wrongdoing. The former president claims the investigation and indictment by the office of Manhattan District Attorney Alvin Bragg is politically motivated. Bragg is a Democrat.
After news broke on March 18, the former president was facing a possible indictment, Trump posted on Truth Social he would soon be arrested and called for protests.
DWAC Stock And The Trump Brand
Truth Social launched after Twitter shut down Trump's account following the Jan. 6, 2021 riot at the U.S. Capitol. Some industry observers contend that a return to Twitter could redirect a large portion of Truth Social's audience to the more mainstream channel.
DWAC stock is down around 92% from its Oct. 22, 2021, high of 175, marked just after news of the Trump merger deal broke.
DWAC stock dropped after Trump officially announced he will once again seek the Republican nomination as presidential candidate in 2024. This was a turnaround after DWAC stock had surged around 70% in early November on news that Trump's presidential bid was imminent.
DWAC stock had also tumbled after the midterm elections, as Republicans fell well short of expectations. Some read the performance as a repudiation of candidates backed by Trump. Given the doubts raised by midterm results, another presidential run is the clearest short-term path to bolstering Trump's brand appeal.
Meanwhile, federal prosecutors are investigating Trump Media and Technology Group for possible money laundering, according to The Guardian. The investigation centers around $8 million sent to Trump Media in 2021 and 2022 that came from "two obscure entities that both appear to be controlled in part by the relation of an ally of Russian president Vladimir Putin."
DWAC Stock: Trump Gets Social Media Platforms Back
The former president had his Twitter account reinstated in late November by Elon Musk. Trump has said he will remain on Truth Social and not rejoin Twitter. He has also returned to Facebook after a more than two-year suspension.
Meta restored Trump's Facebook and Instagram accounts on Feb. 9. On Friday, Alphabet's YouTube announced he was allowed back on the platform.
Trump posted "I'm BACK!" to Facebook on March, 17.
DWAC Stock: Taking Longer To Complete Business
On March 19, DWAC terminated its chief executive, Patrick Orlando, as the special acquisition continues to complete its merger with Trump's company. Orlando will remain on the board of directors and is replaced by Eric Swider on an interim basis.
On Nov. 22, DWAC shareholders approved a one-year deadline extension to take Trump's social media platform public.
DWAC delayed a shareholder vote six times on whether to approve a new deadline of Sept. 8, 2023.
The special acquisition company's (SPAC) deadline to complete its merger with Trump's company had originally been in early Sept. 2022. However, the SPAC claimed a Securities and Exchange Commission investigation into the deal delayed proceedings.
DWAC warned investors the company could potentially cease operations and liquidate shares without the deadline extension.
The company is also hemorrhaging money. The SPAC said it lost $4.8 million in the latest quarter ending on Sept. 30, according to SEC filings. In the first nine-months of 2022, DWAC lost $11.4 million, according to the most recent federal filings.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
