Trump SPAC Digital World plunges almost 30% for second day in a row amid SEC probe
Scott Olson/Getty Images News

Trump SPAC Digital World Acquisition (NASDAQ:DWAC) plummeted almost 30% to the lowest level since the SPAC announced a deal to take Trump's social media company and app Truth Social public in October. DWAC warrants (NASDAQ:DWACW) plunged 24% after falling 16% on Monday and are also at the lowest level since the SPAC deal was disclosed.
The dive comes after the shares fell 13% on Monday after it was disclosed late Friday that the SEC is expanding a previously disclosed probe of the company.
The move also follows news that billionaire Tesla (TSLA) CEO Elon Musk will reportedly be attending a meeting of Twitter (TWTR) employees on Thursday and will take questions on his planned $44 billion purchase of the company. The fact that Musk would attend a meeting may have some investors believing that he is less inclined to try to walk from the deal.
DWAC shares have been weaker in recent months on fears that Musk would invite Trump to rejoin Twitter and Truth Social may be hurt if Trump was back on Twitter after he was banned last year. Musk said last month he would reverse Trump's ban from Twitter if he succeeds in taking over the social media platform.
The SEC recently issued a new subpoena that seeks additional documents and information in regards to the combination of Trump Media & Technology Group and DWAC, according to an 8-K filing from Friday. The "order of examination" may delay the effectiveness of the registration statement, which could "materially" delay the business combination.
The newest subpoena comes after DWAC in early December disclosed it received voluntary information and document request from the SEC, which sought documents relating to meetings of DWACâs board of directors, policies and procedures relating to its interactions with TMTG. DWAC disclosed in its most recent 10-Q filing in May that it had received a subpoena in relation to the probe on the business combination.
Although Musk would allow Trump back on Twitter (TWTR), Trump has said he doesn't plan to rejoin the platform and will instead post on his Truth Social medium. Trump was banned from Twitter (TWTR), Facebook (META) and Google (GOOGL) last year and following his banishment started rival platform Truth Social this year as an alternative outlet to those social-media giants.
The share tumble on Tuesday also follows a short report from Kerrisdale in late April that argued that the SPAC likely won't secure the regulatory approval necessary to complete its purchase of Trump Media & Technology Group. Kerrisdale valued DWAC as the cash held in trust, $10/share, representing 80% downside at the time of the short report.
Digital World Acquisition (DWAC) saw a massive rally in wake of news that it will take Trump's new media company public via a SPAC merger. The stock gained more than 350% when the news was announced Oct. 21. DWAC shares have
dropped 77% from their highs in early March.
Also see from earlier Tuesday, Former NYSE President Farley said SPACs will disappear, capital markets are "completely dead."