Shares of Digital World Acquisition (DWAC) surged 20 per cent in premarket trading on Friday (Jul 21) as a settlement with US securities regulator over fraud charges cleared some of the uncertainty over the blank-check firm’s merger with former US President Donald Trump’s media and tech company.
The special purpose acquisition company (SPAC), which in October 2021 agreed to take Truth Social-parent Trump Media & Technology Group (TMTG) public, agreed to pay US$18 million in fine to settle charges that it had made “material misrepresentations” to investors if it closes the merger.
“It was weighing on shares and this gives investors hope that a deal could be completed,” said Dennis Dick, a trader and equity market structure analyst at Triple D Trading.
If the deal consummates, TMTG will have more than US$1 billion of cash in its reach from the SPAC’s institutional investors.
The move comes after a regulatory filing earlier this month showed that DWAC had reached a non-binding agreement with SEC staff over a probe into its deal to take TMTG public.
Earlier, the SPAC had extended the deadline to acquire TMTG by three months to Sep 8 and named interim boss Eric Swider as its chief executive officer.
Trump founded Truth Social months after he was permanently suspended on Twitter and Meta Platforms’ Facebook and has since amassed more than 5.5 million followers on his conservative social media platform.
For all the latest business News Click Here
