Donald TrumpPlans to take its nascent media company public have suffered another setback, as federal prosecutors issued summons to the firm̵7;s board members it was supposed to acquire on its way to an IPO.
Digital World Acquisition Corp., a special purpose acquisition company (aka a blank-check firm), said in an SEC filing that the summons are part of the company’s investigation by the Justice Department and the SEC. The filing warned that the actions could “materially delay, materially hinder, or prevent the termination of the business combination.”
The initial product of Trump’s ambitions in media and technology is the social media platform Truth Social, which has been in the works for the past few months but to little effect. This has not alienated users from other social media platforms, as it was initially intended. Trump was banned by Twitter after his statements and behavior following the attack on the US Capitol on January 6, 2021.
Trump Media & Technology Group Corp and Digital World agreed to merge last October, anticipating that the transaction will close in the second half of 2022.
Shares of Digital World, the publicly traded vehicle for the Trump deal, fell 9% in morning trading.
Today’s update from the company noted that the federal investigation was previously disclosed. But last Friday, the company revealed that it had received a grand jury summons with “quite similar requests” to previous summons.
The focus of the investigation, the company said, is communications and due diligence regarding Digital World’s due diligence relating to Trump Company, as well as potential targets other than Trump’s firm. Investigators will also look into the relationship between “Digital World (and/or certain officers and directors of Digital World) and other entities (ARC Global Investments II LLC, the sponsor of Digital World, and certain advisors, including Digital World’s underwriters and financial advisors) in its initial public offering),” the filing said.