Truth Social’s proposed merger with Digital World Acquisition Corp. (DWAC) could have helped it expand, but it is unlikely to go through at this stage.
Key Details
- On October 21, 2021, President Donald Trump launched his own social-media network following his account being banned from Twitter on January 8, 2021.
- DWAC is a special purpose acquisition company (SPAC) that was in discussion to help the former president capitalize his new social-media platform prior to its launch.
- Outside investors were expected to commit $1 billion to the merger, in an unconventional investment that would separate DWAC from other recently launched acquisition companies, Axios reports.
- The deal is currently trapped in limbo following legal challenges from the Securities and Exchange Commission (SEC).
Why It’s Important
Despite several indictments in the past few months and being publicly arrested on Tuesday, Donald Trump still remains the Republican frontrunner in the 2024 presidential election. Tuesday’s Morning Consult poll found Trump leading the pack at 59%, followed by Florida Governor Ron DeSantis at 19% and former Vice President Mike Pence at 8%. 76% of Republicans believe that Trump’s arrest was politically motivated, CBS News reports.
Despite or possibly because of his energetic fanbase, Truth Social has mostly remained an app that draws fans of the former president. In the past 20 months, Trump’s Truth Social account has drawn 5.4 million followers, roughly 6% of the number of people who follow his account on Twitter, which was reinstated on November 20, 2022. MarketWatch reports the app has 513,000 active daily users, compared to Twitter’s 217 million.
Truth Social needs external assistance if it wants to grow, but DWAC remains in legal hot water until the SEC approves any transaction. The SEC is investigating claims that Trump and DWAC’s CEO Devin Nunes discussed a merger before his company went public, which would be a violation of securities law. Truth Social has not been implicated. Most of DWAC’s potential investors have shied away from the project, and it remains likely that one or both sides will walk away from the merger, allowing for another company to invest in Truth Social, Axios notes.
