By Louis Juricic
Shares of Digital World Acquisition Corp (NASDAQ:DWAC), the blank-check company that plans to merge with former President Donald Trump's social media firm, Truth Social, declined 9% Monday morning. Weakness in the stock followed the disclosure of grand jury subpoenas.
In a filing with regulators, Digital World Acquisition revealed that on June 16 it became aware that a federal grand jury sitting in the Southern District of New York has issued subpoenas to each member of its board of directors. The subpoenas seek documents related to a previously disclosed SEC probe of the SPAC’s merger with Trump Media & Technology Group. Digital World also received subpoenas from the grand jury.
Commenting on the disclosure from Digital World Acquisition, Trump Media & Technology Group said, “TMTG is focused on reclaiming the American people's right to free expression. Every day, our team works tirelessly to sustain Truth Social’s rapid growth, onboard new users, and add new features. We encourage—and will cooperate with—oversight that supports the SEC's important mission of protecting retail investors.”
Blank-check companies, also known as special purpose acquisition companies or SPACs, are companies created with the intent to merge with another firm, usually as a means of taking the company public.
Digital World Acquisition Corp’s disclosure Monday stated, “These subpoenas, and the underlying investigations by the Department of Justice and the SEC, can be expected to delay effectiveness of the Registration Statement, which could materially delay, materially impede, or prevent the consummation of the Business Combination.”