The board members of Digital World Acquisition Corp. (DWAC, $25.16), which seeks to merge with former President Donald Trump's firm Trump Media & Technology Group (TMTG), have each been served subpoenas by a US federal grand jury with regards to the merger. DWAC disclosed the subpoenas due to transactions with a business called Rocket One Capital.
Shares of the blank-check company dropped nearly 10% on Monday; the stock has now lost more than half its value this year, adding to doubts for investors about the merger going through. The merger between DWAC and TMTG was approved in October of last year, and the deal was scheduled to be finalised in the second half of this year.
The merger is expected to give TMTG's Truth Social, which was launched after Trump's Twitter ban, $1.3b in funding. Truth Social is also expected to debut on the stock market when the transaction closes in the second half of 2022.
Why it matters
The subpoenas could potentially prevent or delay the merger of DWAC with Trump's social media company, according to DWAC, whose stock price has already fallen by more than half since 2022.
