Whatever else you may think of him, Trump is not a fool. So, when the former US president deserts his extremely own Twitter-like echo chamber of sorts, Truth Social, in favor of Elon Musk’s X social networks platform, the implications are multivarious not just for Trump’s political fortunes but also those associated with the SPAC Digital World (NASDAQ: DWAC), which is slated to take Trump Media and Technology Group (TMTG) – the entity behind the Truth Social platform – public in an extremely anticipated reverse merger.
— Donald J. Trump (@realDonaldTrump) August 25, 2023
After a hiatus of two and a half years, Trump returned to X with a bang, posting his mugshot with a variety of memorable mottos created to renew his base.
I understand that Trump is contractually obligated to post only on Truth Social, and on other media just after a delay. Is the cold feet about wanting to return to Twitter for his presidential campaign?
— @annmlipton @esq. social (@AnnMLipton) July 3, 2023
In early July, we noted that Trump might be having second thoughts vis-a-vis Truth Social. Specifically, Ann Lipton, a law professor at Tulane, mentioned an e-mail priced quote by the New York Times, which pointed out that the Trump Media and Technology Group was “currently only bound under the merger arrangement [with Digital World] through Sept. 8, 2023.” According to the teacher, this suggested at the time that Trump was having “cold feet” vis-à-vis his dedication to Truth Social and that he seemed angling to return to X as his presidential campaign got steam.
On a much deeper level, Trump’s go back to X suggests that TMTG might not be interested in pursuing a merger with Digital World beyond the 08th of September, when the SPAC is slated to liquidate should it fail to protect another extension – through an investor vote – in the due date to skilled its prepared merger with TMTG by the 05th of September.
Additionally, as we noted the other day, Digital World is now also facing the specter of punitive actions from the Nasdaq exchange on the back of dual delinquencies connected to the filing of quarterly monetary declarations.
It was just recently that Digital World reached a settlement with the SEC for misleading investors by stopping working to reveal a variety of merger-related initial discussions with TMTG in addition to other financiers in the spring and summertime of 2021.
Trump has just 6.4 million fans on Truth Social. At the time of composing, the previous US president’s newest tweet had currently garnered 228 million views on the X platform, rendering Truth Social a has-been in Trump’s shrewd political calculus. This, naturally, sets the stage for an unraveling of the merger arrangement in between Digital World and TMTG. Without its raison d’être, Digital World’s stock cost is nearly guaranteed to take a deep plunge.
Do you believe a brief position on Digital World shares is now justified? Let us know your ideas in the comments area below.