Digital World Acquisition stock, the special purpose acquisition company aiming to take former President Donald Trump's tech and social-media platform public, jumped higher early Friday. The move followed Trump's announcement that he'd been indicted by a federal grand jury in a case involving confidential documents.
The Department of Justice indicted Trump, a top candidate for the Republican presidential nomination in 2024, on Thursday. It marked the first time in history that the federal government has brought charges against a former president.
Federal prosecutors charged Trump with seven counts, Trump attorney Jim Trusty told CNN on Thursday. The charges include violations of the Espionage Act, which bars the misuse of classified information, as well as obstruction and false statements.
Federal prosecutors for months built a case alleging that Trump purposefully withheld confidential documents about U.S. intelligence and defense plans, according to the Wall Street Journal. The DOJ has not made the indictment public.
The Stock
Trump took to Truth Social declaring his innocence to his 5.37 million followers.
"I AM AN INNOCENT MAN. THE BIDEN ADMINISTRATION IS TOTALLY CORRUPT," Trump wrote.
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.
DWAC stock advanced 1.6% to 13.11 Friday during market action. On Thursday, DWAC edged up a fraction to 12.90. The stock down 31% from a January high of 18.77.
Shares of DWAC also bolted higher when Trump was indicted in late March for allegedly paying hush-money to a porn star during the 2016 election. Shares rose 3.6% on May 9, when a Manhattan jury found the former president liable for sexually abusing and defaming a New York author and advice columnist, warding the plaintiff $5 million.
Trump attorneys on Thursday asked a judge to reduce the award to about $900,000 or grant Trump a new trial.
DWAC And The Donald Trump Brand
DWAC stock is tightly bound up in the value of the Donald Trump brand. Trump's current status as the top Republican candidate for president figures squarely in the stock's value. However, federal charges could potentially tarnish that brand.
"If (former) 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 (Trump Media and Technology Group) 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.
Truth Social launched after Twitter shut down Trump's account following the Jan. 6, 2021, riot at the U.S. Capitol. Elon Musk bought Twitter in October and reinstated Trump's account. 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. Shares are down 81% since Musk began his purchase of Twitter in January 2022.
DWAC stock dropped after Donald Trump officially announced he would 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.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
