Designs for Donald Trump’s Truth Social IPO appear to be in jeopardy again, Forbes reported Friday.
Three executives suddenly left the company, tasked with taking the former president’s Truth Social platform public amid investigations and market turmoil, according to Forbes. It was not immediately clear why they left.
The departures at the highest level, including the chief financial officer, were revealed in filings from Digital World Acquisition Corp., the special-purpose acquisition company (SPAC) chosen to move the social media platform into the big leagues.
The “mountain of resignations” follows the departure of yet another board member who stepped down in early November, Forbes reported. That was shortly before shareholders agreed to back a move to extend an early December deadline to complete the acquisition of Truth Social. It pushed the deadline back to September 2023, which will be nearly two years after the SPAC initially announced its deal to acquire Truth Social and take it public.
Share prices of Digital World fell 10% on Thursday after the former president promised a “major announcement” this week that turned out to be the sale of a Donald Trump digital trading card collection. Investors in the digital world were probably hoping for something to bolster his status as a 2024 presidential candidate – and the stature of the company – or some good news about Truth Social
Trump’s operation has been beset with problems and has faced investigations.
A major web hosting operator claimed in August that Truth Social owed approximately $1.6 million in contractually mandated payments.
Then Truth Social’s trademark application was rejected after the U.S. Patent and Trademark Office found that Trump’s company name was “confusingly similar to the names of other entities.”
In addition, the SPAC has been investigated by the Securities and Exchange Commission for possibly negotiating the merger agreement before DWAC went public, which would be against the law.
Digital World also warned in an August Securities and Exchange Commission filing that a dip in Trump’s popularity could hurt the company. The filing noted that Truth Social’s success depends on the “reputation and popularity” of Trump, who chairs the Trump Media and Technology Group, which owns and operates the social media platform.
Shares of Digital World fell another 4% in pre-market trading on Friday to about $19.20, Forbes reported. The stock has lost more than 80% of its value since a high of over $100 in March.
