SEC Approves Controversial Merger Between Trump Media and DWAC
TMTG is the parent company of Truth Social, Trump’s social media platform that aims to rival Twitter and Facebook.
Trump Media & Technology Group, the media and technology company of former U.S. President Donald Trump, has received the green light from the U.S. Securities and Exchange Commission (SEC) to go public through a merger with Digital World Acquisition Corp. (DWAC), a special purpose acquisition company (SPAC).
The deal, which has been in the making since October 2021, could give TMTG a valuation of up to $10 billion, according to DWAC’s share price on the day of the announcement. TMTG is the parent company of Truth Social, Trump’s social media platform that aims to rival Twitter and Facebook.
Johan Chairil
Trump Media - The Future
The SEC’s approval is a significant boost for Trump and his media venture, which has encountered several hurdles and regulatory scrutiny over the years. The merger would allow Trump to own a majority stake in the new entity, worth nearly $4 billion, and have the power to appoint the board members and veto any decisions that would require the consent of the shareholders, such as the sale of the company.
However, the merger is not a done deal yet, as it faces opposition from TMTG’s co-founders, who have reportedly threatened to stop the transaction. The co-founders, Andy Litinsky and Wes Moss, are said to be dissatisfied with the terms of the deal and have questioned the valuation of the company.
They have also raised ethical issues, as the merger would give Trump a dominant position in the new company, with the ability to influence its direction and strategy.
Whistleblower
The co-founders of TMTG were named in a whistleblower complaint that accused the company of inflating its user numbers and revenue figures, according to Reuters. The co-founders have not made any public statements on the matter, and it is uncertain whether they have the legal grounds or the support to block the merger.
The merger has also faced delays and challenges from the regulators, who have conducted a rigorous investigation into the proposed transaction. In June of 2022, DWAC announced that the SEC had requested more documents and information about the merger, which slowed down the process.
The SEC’s approval of the merger is a rare win for Trump, who has been banned from major social media platforms and has faced multiple lawsuits and investigations since leaving office.
Truth Social is a social media platform created by former U.S. President Donald Trump and his media and technology company, Trump Media & Technology Group (TMTG). It is a competitor to Twitter and Facebook, and claims to promote free speech and open dialogue without political bias.
Truth Social uses Mastodon, an open-source software, as its backend, and allows users to post messages called “Truths” and “Re-Truths”. Truth Social was launched in February 2022, after Trump was banned from major social media platforms following the 2021 U.S. Capitol attack.