SPAC tied to Trump’s social media venture receives regulatory inquiries

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Digital World Acquisition Corp said on Monday it had received requests for information from the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA) between late October and early November.

The SEC had sought documents relating to communications between the blank check firm and Trump’s social media venture, meetings of DWAC’s board, policies and procedures relating to trading, the identification of banking, telephone, and email addresses and the identities of certain investors.

FINRA asked for detail surrounding events, specifically, a review of trading that preceded the public announcement of its merger with Trump Media & Technology Group Corp (TMTG).

Shares of Digital World Acquisition Corp reversed course to trade down 6% in morning trade.

The Monday filing by DWAC comes after TMTG said on Saturday it had entered into agreements to raise about $1 billion from a group of unidentified investors as it prepares to float in the U.S. stock market.

Trump Media inked its deal with Digital World to go public in October at a valuation of $875 million, including debt. The venture is now valued at almost $4 billion based on the price of Digital World shares at the end of trading on Friday. Trump supporters and day traders snapped up the stock.

Some Wall Street investors are reluctant to associate with Trump. He was banned from top social media platforms after the Jan. 6 attack by his supporters on the U.S. Capitol amid concerns he would inspire further violence. The Capitol attack was based on unsubstantiated claims of widespread fraud in last year’s presidential election.

In the first public set of projections since the announcement of the merger, DWAC also said it expects Trump’s social media app, TRUTH Social, average revenue per user to grow to $13.50 in 2026, with 81 million total users.

DWAC also said it expects TMTG to reach 40 million total subscribers by 2026.

Social media platform Twitter Inc (NYSE:TWTR) has over 200 million daily active users.