Akin to a crippled ship caught within the swirling currents of a maelstrom, Digital World shares have been staring at near-certain catastrophe, buffeted by the growing travails of former US President Trump. However, the horizon does appear to be clearing for Trump, at least where one high-profile indictment is concerned.
The Trump Media and Technology Group (TMTG), which aims to become the go-to media source for the conservative-leaning audience and encapsulated by Truth Social – a Twitter-like social media platform – as well as an upcoming “non-woke” video-on-demand service plus additional cloud-based products, is slated to merge with the SPAC Digital World. The merger will furnish TMTG with badly-needed cash proceeds, including $293 million that Digital World raised in its IPO, plus hundreds of millions of dollars in additional PIPE investments. However, this planned merger has been complicated by an ever-growing number of federal investigations related to violations of securities law and money laundering.
Against this morose backdrop, Digital World shareholders have had to contend with another legal headache, this time concerning the beating heart of the investment thesis surrounding Digital World and TMTG, namely, Trump himself.
The Manhattan District Attorney formed a grand jury in January 2023 following his investigation of Trump for allegedly paying $130,000 in hush money to the adult-film actress Stormy Daniels. This payment was reportedly routed via Trump’s personal attorney Michael Cohen. The payment was intended to purchase Daniels’ silence vis-à-vis a sexual altercation with Trump back in 2006 during a celebrity golf tournament. Bear in mind that Cohen publicly admitted his role in this saga back in 2018. For his part, Trump continues to deny any knowledge of the transaction. Meanwhile, Rudy Giuliani, another longtime Trump associate, has already accepted that Trump reimbursed Cohen for the hush money sent to Daniels. However, the former US President continues to maintain that the payment in question was not, in fact, a reimbursement but a monthly retainer. Cohen was jailed in 2018 on two counts, including violations of campaign finance law.
This brings us to the crux of the matter. As per the reporting by Politico, the Manhattan grand jury is now slated to hear evidence against Trump in April following a “previously scheduled hiatus.” This means that Trump’s indictment, if given the final go-ahead, will only materialize in late April. This bodes well for Digital World’s short-term prospects.
Regardless of the modalities in this case, it is highly unusual for a local prosecutor to go after a Presidential candidate in such an aggressive manner. Moreover, do note that the US Department of Justice has already declined to pursue these hush money allegations. Furthermore, the purported crime was committed around 7 years ago, patently beyond the 2-year statute of limitation for a misdemeanor and the 5-year limitation for a felony.
BREAKING: New Bombshell Document DESTROYS Manhattan DA’s Case Against Trump
2018 Letter from Michael Cohen’s lawyer to the FEC declares Cohen used his own personal funds to pay Stormy Daniels. Trump Camp. NOT party to transaction, did NOT reimburse Cohen for payment. It’s OVER pic.twitter.com/QacsjSbZAz
— Benny Johnson (@bennyjohnson) March 22, 2023
Last week, Trump highlighted the discovery of a letter that was written in 2018 by Michael Cohen’s attorney to the Federal Election Commission. The letter declared that Cohen used his personal funds to pay Stormy Daniels. It also states that Cohen was not reimbursed for this transaction.
$DWAC / TMTG DMA defines “Material Disruptive Event as:
Trump runs for President or goes to jail
and “the Company shall be structured in such a way as to eliminate the need for restructuring of ownership …were a Material Disruptive Event to occur”https://t.co/Puz8BB9OiL pic.twitter.com/2LQKB0tYcN
— Julian Klymochko (@JulianKlymochko) October 26, 2021
In a previous filing, Digital World has described a “Material Disruptive Event” in the following words:
“Material Disruptive Event means the occurrence of any of the following after the Closing (i) the Company Principal announces that he is running for a public office, or (ii) the Company Principal is personally convicted of a felony criminal offense.”
Today’s development means that a Material Disruptive Event has been delayed for a few weeks at least.
Meanwhile, as stated previously, Digital World is increasingly finding itself besieged from all sides. On Wednesday, the SPAC announced that Eric Swider, a DWAC board member, would replace Patrick Orlando as the new CEO in an interim capacity. In its press release, the SPAC conceded that it faces “unprecedented headwinds.”
In the absence of a merger between Digital World and Trump Media and Technology Group (TMTG), Truth Social can continue operating at current levels until September. However, as we reported a few days back, Trump’s social media platform is now resorting to layoffs to conserve precious cash resources.
The post “Material Disruptive Event” For Digital World Shares Now Delayed as Trump’s Possible Indictment on Paying $130,000 in Hush Money to the Adult-film Actress Stormy Daniels Gets Pushed to April by Rohail Saleem appeared first on Wccftech.
