US regulators are looking into the deal that would bring former president Donald Trump’s new social media company to the stock market, one that has attracted both legions of his fans and people looking to make a quick profit.
The company partnering with Trump Media & Technology Group acknowledged the inquiries in a filing it made with regulators on Monday.
It also gave some financial forecasts for the company, which is hoping to rival Twitter and other platforms that banned Mr Trump, along with Netflix and other streaming video services. It said over the weekend that it has lined up $1 billion in promised investments from a group of unnamed institutional investors.
The regulatory questions focus on the October announcement by Mr Trump’s media venture that it would merge with Digital World Acquisition Corp, which launched on the US stock market three weeks earlier with the sole purpose of finding a privately held company to buy.
DWAC said on Monday that it is cooperating with “the preliminary, fact-finding inquiries” by the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The SEC early last month requested documents related to meetings of DWAC’s board, trading policies and communications between DWAC and Mr Trump’s media venture, among other things.
According to DWAC, the SEC’s request said the commission’s “investigation does not mean that the SEC has concluded that anyone violated the law or that the SEC has a negative opinion of DWAC or any person, event, or security.”
The SEC could be looking at whether DWAC and Mr Trump’s company had any conversations about a deal before DWAC’s own initial public offering of stock, said Jay Ritter, a professor at the University of Florida who is an expert on IPOs.
DWAC currently holding are a reported $293 million in cash raised through its IPO.
Under rules for these blank-cheque companies, known as special-purpose acquisition companies, or SPACs, they’re not supposed to line up acquisition targets before selling their own shares.
The merger announcement sent DWAC’s stock surging from $9.96 to $94.20 in just two days as Trump supporters and investors looking to make a fast buck bought in. The shares have since pulled back to roughly $43.
Such a lofty price indicates high expectations for Mr Trump’s media venture among at least some investors. In its filing with regulators, DWAC also gave some financial forecasts for the company, which has yet to launch.
The presentation included forecasts that the company’s Truth Social service may have 81 million users by 2026, or nearly 7 million more people than voted for Mr Trump in the 2020 US presidential election.
In five years, Trump Media is forecast to generate nearly $3.7 billion in revenue, according to the filing.
SPACs generally are known for giving very optimistic forecasts about their future growth in presentations to investors.
DWAC was shaky in Monday trading following the filing. It opened with a slight gain before falling to a 3.2 per cent loss.
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
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Look north
BBC business reporters, like a new raft of government officials, are being removed from the national and international hub of London and surely the quality of their work must suffer.
UAE currency: the story behind the money in your pockets
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At a glance
- 20,000 new jobs for Emiratis over three years
- Dh300 million set aside to train 18,000 jobseekers in new skills
- Managerial jobs in government restricted to Emiratis
- Emiratis to get priority for 160 types of job in private sector
- Portion of VAT revenues will fund more graduate programmes
- 8,000 Emirati graduates to do 6-12 month replacements in public or private sector on a Dh10,000 monthly wage - 40 per cent of which will be paid by government
Titan Sports Academy:
Programmes: Judo, wrestling, kick-boxing, muay thai, taekwondo and various summer camps
Location: Inside Abu Dhabi City Golf Club, Al Mushrif, Abu Dhabi, UAE
Telephone: 971 50 220 0326
Iftar programme at the Sheikh Mohammed Centre for Cultural Understanding
Established in 1998, the Sheikh Mohammed Centre for Cultural Understanding was created with a vision to teach residents about the traditions and customs of the UAE. Its motto is ‘open doors, open minds’. All year-round, visitors can sign up for a traditional Emirati breakfast, lunch or dinner meal, as well as a range of walking tours, including ones to sites such as the Jumeirah Mosque or Al Fahidi Historical Neighbourhood.
Every year during Ramadan, an iftar programme is rolled out. This allows guests to break their fast with the centre’s presenters, visit a nearby mosque and observe their guides while they pray. These events last for about two hours and are open to the public, or can be booked for a private event.
Until the end of Ramadan, the iftar events take place from 7pm until 9pm, from Saturday to Thursday. Advanced booking is required.
For more details, email openminds@cultures.ae or visit www.cultures.ae
