By customary investment rules, Trump Media & Technology Group (DJT) should still be privately held. For one, Digital World Acquisition Co., the public company that merged with Trump Media on March 26, had previously hit rocks that would have sunk any other ship. DWAC on several occasions had postponed its scheduled purchase of Trump Media, had been fined $18 million by the SEC and been forced to restate its previous filings, had lost its institutional investors and changed its accounting firm.
Under normal conditions, DWAC would have ceased to exist. Shareholders in special purpose acquisition companies, as DWAC was structured, have the right to demand the return of their initial investment until that company consummates a deal. (That is what DWAC's institutional investors did.) Retail investors surely would have treated DWAC similarly, had not its target carried the name Trump.
The news became stranger yet on March 26 when, against the tide, the merger proceeded, permitting Trump Media to become publicly listed.
This is a preview of John Rekenthaler's latest article. Read the full column here.
