A federal grand jury and securities regulators served subpoenas on Donald Trump’s social media organization and many of its employees, according to a public statement made on Friday. This might cause a deal that promised the financial infusion required to compete with Twitter to be delayed or even abandoned.
There are plans for Digital World to purchase Trump Media.The SEC investigation had an impact on Digital World’s price.Truth Social was unveiled in February.
According to a Friday public statement, a federal grand jury and securities regulators served subpoenas on Donald Trump’s social media company and several of its employees. This might lead to the delay or even cancellation of a deal that offered the cash infusion necessary to compete with Twitter.
According to a securities filing made by Digital World Acquisition on Friday, the Securities and Exchange Commission and a grand jury in New York have issued subpoenas to Trump Media & Technology Group. Plans call for Digital World to acquire Trump Media, freeing up $1.3 billion (or around Rs. 10,263 crore) for the startup business. Even so, it’s improbable that the sale would be finalised while there are still two legal inquiries open.
According to a statement from Trump Media, Trump, who serves as the company’s chairman, was not among the employees who received subpoenas. On Monday, Digital World disclosed that it had received subpoenas from the same grand jury that the Manhattan US Attorney’s Office had convened. The SEC’s ongoing investigation into alleged SEC violations at Digital World has hurt the stock. The price of the Digital World shares was $5.78 on Friday (about Rs. 450), down 25% from the previous day.
The stock price increased above $100 (about Rs. 7,800) the previous year when the company announced a plan to buy the former president’s social network company. The SEC is looking into whether Digital World broke any rules by seriously considering buying Trump’s company starting in early last year, before Digital World’s initial stock offering in September. A few weeks later, it said that it would buy Trump’s company. Digital World belongs to a formerly popular category of companies known as “blankcheck” companies.
These companies go public as empty corporate entities with no operations and merely make a promise to investors that they will one day purchase a business. They are allowed to instantly offer stock to the public without the usual regulatory disclosures and procedures, so long as they haven’t already identified potential acquisition targets.
Trump’s social media network, Truth Social, made its debut in February. It asserted that it was opposed to speech limits put in place by Big Tech. Trump’s access to Twitter, Facebook, and YouTube last year was restricted following the incident at the Capitol on January 6.
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