Trump Social’s funder a week from going belly-up
https://www.washingtonpost.com/technology/2023/09/02/truth-social-trump-media-digital-world/
For Digital World, it would signal the ultimate financial fall from grace
for a special purpose acquisition company, or SPAC, that turned its
proximity to the former president into what was once one of the stock market’s hottest trades. Its share price, which peaked in its first hours
at $175, has since fallen to about $14.
Then, in the past year, its issues became more pronounced: Its chief
executive was terminated by the board, a former board member was arrested
on charges of insider trading, and the company agreed to pay an $18 million settlement to resolve charges that it had misled investors and given false information to the Securities and Exchange Commission.
The merger has “been pretty much unprecedented in terms of all of the glitches,” said Jay Ritter, a University of Florida finance professor who studies stock markets. “The deal does seem to be running out of time. You can’t just keep getting extensions forever.”
Digital World’s shareholder base is made up largely of small-time “retail”
investors, making it harder for the company to boost shareholder
participation in critical votes. Ritter said he suspects these investors,
many of whom bought shares out of love for Trump or loyalty to his brand
[a/k/a MAGA suckers], may not be paying attention as the liquidation
deadline approaches.
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