Miami-based Digital World Acquisition Corp. (DWAC), the blank check company aiming to merge with former President Donald Trump’s media ventures, has taken a significant step forward in the process. The Securities and Exchange Commission (SEC) has declared DWAC’s registration statement for the deal effective, enabling the company to proceed with scheduling a shareholder vote on the combination.
Following this news, DWAC shares closed up 16% on Thursday, reflecting positive investor sentiment.
The merger would bring Trump Media & Technology Group, the owner of the Truth Social platform, into the public sphere. Truth Social is a platform similar to the former Twitter, now known as X. DWAC CEO Eric Swider expressed his satisfaction with the SEC’s decision, referring to it as a “significant milestone.”
However, DWAC has faced several regulatory challenges that have delayed the merger for over two years. Discussions between DWAC and Trump Media began in 2021, but last summer, three individuals were charged with insider trading in relation to the proposed merger. These individuals have pleaded not guilty.
In a regulatory filing, DWAC noted a potential conflict with its former CEO Patrick Orlando, who holds a substantial number of founder shares and placement units in the company. Orlando is seeking additional compensation, which DWAC considers a risk to the timely completion of the merger.
Despite these obstacles, DWAC’s shares have seen a tremendous increase of 190% this year. This surge in value coincides with Trump’s strong position as the Republican front-runner during the primary season. On Thursday, other stocks associated with Trump, such as online video platform Rumble and software company Phunware, also experienced gains.
DWAC has amended its registration filing to include nominees appointed by Trump Media for its board. Notable additions include Robert Lighthizer, former U.S. Trade Representative under the Trump administration, and Linda McMahon, former Chief of the Small Business Administration.
