Donald Trump’s bid to recapture his social media presence hits a snag after Elizabeth Warren launches attacks for possible securities violations. Also, this SPAC pops over 40% after a deal closes and a merger vote gets pushed due to accounting complications. Read on to find the latest on all things SPACs.
$DWAC Falls as Warren Calls on SEC Probe for Securities ViolationÂ
Senator Elizabeth Warren has asked the SEC to investigate Digital World Acquisition Corp for possible securities violations the SPAC may have committed by holding private and undisclosed discussions as early as May 2021.Â
Warren believes that DWAC is a classic example of SPACs misleading investors and the public about materially important information. Warren states that the omission in information resulted in Hedge Funds making money at the cost of trapping retail investors in a stock bubble.
Four hedge funds D.E. Shaw, Lighthouse Investment Partners, ATW Spac Management, and Saba Capital sold their unrestricted shares after the deal was announced. Shares of DWAC rose as much as 1657% when the deal was announced, but fell from $175 to $56. Warren stated that the transaction looked suspiciously like a ‘Scheme’ as ‘Trump’s SPAC was Screwing his own Supporters’. Furthermore, the deal is structured in a way that Trump Media and Technology Group (the target company) will see a huge payout if the share prices remain elevated. If DWAC stock remains above $30 forty-five days after the merger, TMTG will receive an additional 40 million shares, worth $2.3 Billion, further diluting DWAC holders.Â