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Digital World Acquisition Corp. and Trump Media & Technology Group are having a rough month.
The blank check company trying to merge with former President Donald Trump’s latest venture has seen its stock tumble 30 percent since the start of September. Shareholders have not yet come out with enough support to give the companies another year to close the deal. And Wall Street investors who had pledged to put $1 billion into the combined company have started to walk away, with some recently telling POLITICO that the deal was no longer worth it.
Now, Elon Musk is joining list of complications.
Tesla’s CEO’s opposition to buying Twitter for $44 billion has thrown officials across Washington, the banks that originally planned to provide financing for the deal and just about everyone else for a loop, including Digital World and Trump Media. That’s because Trump Media’s signature product is Truth Social, the conservative social media app that today acts as Trump’s only online benefactor after his ouster from platforms including Twitter.
Truth Social itself has struggled to generate much traction beyond the conservative pundits, former Trump administration officials and other supporters of the former president who populate the platform today. But Musk’s easy-going vision for Twitter — based on less moderation and more free speech — threatens to further diminish Social Truth, even if Trump fends off an invitation to return to Twitter.
Investors seemed to recognize that much after initial reports that Musk and Twitter were back. Digital World shares fell more than 5 percent in trading on Tuesday. The stock rose just 0.3 percent on Wednesday.
Dark clouds have rolled in about Digital World and Trump Media for months. But Musk’s acquisition of Twitter won’t be the most important event surrounding Trump’s deal to happen over the next week.
That will come on Monday, when Digital World is scheduled to hold a shareholder meeting where it can finally announce whether enough shareholders have voted in favor of a 12-month deal extension.
It’s being held up by the SEC, which is still reviewing and investigating the transaction nearly a year after it was first announced — drawing the ire of Trump and Truth Social users in the process. “Defund the SEC” is even starting to populate the platform with increasing frequency, Matthew Goldstein of The New York Times reported on Wednesday.
Currently, companies have two more months to finalize it, although Digital World supporters can extend it until March. Digital World CEO Patrick Orlando has been posting on Truth Social to try and rally investors to vote for the extension over the past few days, even urging Trump to promote the vote.
Trump, meanwhile, has been on the campaign trail, attacking the SEC and saying it doesn’t need to take the company public.
IT’S THURSDAY – Happy Labor Day to all who celebrate. Got tips, story ideas and comments? You know what to do: [email protected] AND [email protected].
Federal Reserve Governor Lisa Cook speaks at 1 p.m. … Fed Governor Chris Waller speaks at 5 p.m.
OPEC+ anxiety— OPEC’s move to cut oil exports on Wednesday is fueling an autumn of anxiety for Democrats over energy inflation as prices at the gas pump march higher, Josh Siegel reports.
It could also undermine the Treasury’s plan to implement a global cap on the price of Russian oil, part of a broader effort to maintain global supply (and keep prices in check) by reducing Russia’s energy revenues. By Benoit Faucon of the WSJ and Summer said: “OPEC+ production cuts will limit Russia’s loss of market share, delegates said, who acknowledged it represented an unprecedented effort by the world’s biggest oil producers to help collectively Russia with the political and economic problems caused by the war in Ukraine”.
treasury officials have said the price cap – which would be set at a fixed dollar amount, not a percentage discount – would continue to put downward pressure on Russia’s oil revenues, even if overall prices rise.
But you still have an inflation problem. Even if a recession comes next year, “we expect the Fed to be extremely resistant to cutting rates amid high energy prices (which OPEC+ is helping to fuel), volatile food costs and other policy pressures.” remaining prices,” wrote analysts at Markets Policy Partners. a note.
FIRST IN MM: THE OPENING OF SALVOS Americans for Financial Reform came out with a blog post this morning blasting a coalition of major bank trade groups over their lawsuit against the Consumer Financial Protection Bureau seeking to overturn the agency’s new crackdown on lending discriminatory.
Among the criticisms: They accuse groups, including the U.S. Chamber of Commerce and the Consumer Bankers Association, of “attempting to drag their disputes with the CFPB into a more favorable arena, namely a judiciary with a strong pro- corporate and right-wing. Further down the chain, they have their sights set on the Supreme Court with the possibility of stopping government efforts that help real people, both legacies of the Trump administration.”
SOCIAL MEDIA COMES TO SEC – NYT’s Matthew Goldstein on conservative social media attacks on SEC over its investigation into Trump’s shoddy SPAC deal: “There are calls to ‘defund the SEC’ Shareholders are preparing to petition the commission to ending the ‘waste’ investigation and approving the deal. There is even a call to pray for the Digital World in a weekly video show on Rumble, a right-wing broadcast media site that is a business partner of Trump Media. It’s shareholder activism — with a Make America Great Again twist.”
Incoming CBDC REPORT — President Joe Biden’s executive order on cryptocurrencies gave Attorney General Merrick Garland until Oct. 5 to produce a legislative proposal — if deemed necessary — that would allow the US to issue a central bank digital currency. Well, Wednesday came and went without its release, and GOP leaders on the House Financial Services Committee are questioning the suspension. “Committee Republicans emphasized in our CBDC principles that the Federal Reserve does not have the statutory authority to issue action absent a CBDC from Congress,” it wrote. Patrick McHenry (NC) and Rep. French hills (R-Ark.) in a letter to Garland on Wednesday. They have asked Garland to provide text by October 15th.
HERE COMES THE BREAK – WSJ: “Expect some pain in the fight against inflation. … Yet sudden adjustments could lead to a more severe slowdown than the Fed and other central banks want. Threats to financial stability sometimes come from unexpected sources. “There are no immaculate tightening cycles,” said Mark Spindel, chief investment officer of MBB Capital Partners LLC in Washington. ‘Holidays of things’.
HUNTING IN THE TULIPS – Bloomberg’s Bailey Lipschultz: “As the US economy slowly buckles under the strain of rising interest rates, corporate bankruptcies will pile up. Few on Wall Street doubt it. The real question they have is what types of companies and industries will surrender first. A good place to start looking: firms that went public through SPACs.”
HOW MUCH CAN POLES FLY? – WSJ’s Patrick Thomas: “Tyson Foods Inc. is closing several of its corporate offices across the country as rising costs push the meat giant’s bottom line after two years of rising profit margins.”
SWIFT – Our Sam: “Global financial messaging service SWIFT said Wednesday it is prepared to incorporate central bank-issued digital currencies and tokenized financial assets into its service — a major development in the potential adoption of blockchain-based networks .”
TREAT AS CASES THE SAME – POLITICO Europe’s Bjarke Smith-Meyer: “Crypto’s Wild West Era May Be Coming to an End… [Financial Stability Board]which was born in the wake of the 2008 financial crisis to avoid further shocks, will propose the plan to rein in crypto finance ministers and central bankers to the Group of 20 industrialized nations meeting in Washington next week, the chief architect of the plan. Steven Maijoor, told POLITICO.
Brian Yates has joined the Electronic Transactions Association as senior director of state government affairs. Yates previously served as a state lobbyist and was a member of the Missouri House of Representatives.
More than four in five Americans living with long-term Covid say their daily activity is limited by their ongoing Covid-19 symptoms, according to data released Wednesday by the Centers for Disease Control and Prevention. — Our Krista Mahri
Louisiana Republican Treasurer, John Schroder, said Wednesday that he plans to withdraw all of his office’s $794 million in cash from BlackRock Inc. by the end of the year, joining other red-state officials protesting the firm’s stance on environmental, social and governance issues. — Our Jordan Wolman
