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Truth Social merger partner’s shares rise after Trump weighs in on Elon Musk Twitter deal

PUBLISHED FRI, OCT 28 202212:15 PM EDTUPDATED FRI, OCT 28 20226:31 PM EDT

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Jack Stebbins @JACKSTEBBS

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Shares of DWAC, the SPAC that is supposed to take Donald Trump’s Truth Social, rose Friday.
The decline comes as Twitter is taken over by Elon Musk, who previously said he would reinstate Trump’s account.
Trump created Truth Social after he was banned from Twitter following the Jan. 6, 2021, Capitol riot.

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The TRUTH Social website is seen on a mobile device with an image of former US president Donald Trump in the background in this photo illustration in Warsaw, Poland on 23 February, 2022.

Nurphoto | Getty Images

Shares of Digital World Acquisition Corp., the blank check company set to take Trump Media and Technology Group and its Truth Social platform public, rose Friday as Elon Musk took the reins at Twitter.

Musk has previously said that he would reinstate Trump’s account on Twitter, which was banned after the Jan.6, 2021, Capitol riot. The former president had around 88 million followers on Twitter, but he’s amassed only 4.37 million on Truth Social.

DWAC shares closed more than 3% higher Friday, amid a broader market rally, after dipping earlier in the day. The stock has fallen more than 67% so far this year to $17.07. Its 52-week high was $101.87.

Barring legal intervention, Trump Media currently has until December to complete the merger with DWAC and go public. A shareholder vote is set for Thursday to extend that deadline to September 2023, but the past four such votes have failed to garner the necessary 65% shareholder approval.

Trump posted on Truth Social Friday praising Musk’s acquisition, but also touting his own platform.

“TRUTH SOCIAL has become somewhat a phenomena. Last week it had bigger numbers than all other platforms including TikTok, Twitter, Facebook, and the rest,” Trump wrote. “I am very happy that Twitter is now in sane hands, and will no longer be run by Radical Left Lunatics and Maniacs.”

DWAC didn’t immediately respond to a request for comment.

The ex-president’s platform still has to clear some legal and financial hurdles.

A Securities and Exchange Commission whistleblower complaint from a former Truth Social executive, William Wilkerson, alleged that Trump Media and DWAC discussed a merger prior to DWAC’s announcement, which would violate securities laws. The merger is currently the subject of a federal criminal probe.

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DWAC has previously warned that a failure to extend the deal may result in the SPAC liquidating, and Trump has warned that he may not need the hundreds of millions from the deal.

“If they don’t come with the financing I’ll have it private,” Trump said to supporters in an early-October rally in Michigan. “Easy to have it private.”

The ex-president has gathered a fair share of private financing for Trump Media and Technology Group.

High-profile investments include $9.8 million from Karl Pfluger, an oil executive and brother of Trump-endorsed U.S. Rep. August Pfluger, R-Texas.

A spokesperson for August Pfluger told Reuters that he doesn’t have a personal investment in Trump Media & Technology Group, saying: “He earned the endorsement of President Trump long before the creation of Truth Social.”

Other investors include Patrick Walsh, a former associate of Trump Media Chief Financial Officer Philip Juhan, who has a $6.2 million stake. Roy Bailey, who was the co-finance chair of Trump’s 2020 re-election campaign, gave $200,000 to Trump Media. George Glass, Trump’s ambassador to Portugal, gave $500,000. Texas fruitcake mogul Bob McNutt invested $100,000.

About $1 billion more in private investing was set to come through DWAC upon the completion of the merger, but a key deadline passed in September, allowing investors to pull their stake. Since then, at least $138 million in financing has been pulled.

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