This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

Just when things finally started to take a turn for the better for Digital World investors, former President Trump just announced an adverse development that now threatens to demolish any budding enthusiasm related to the dilapidated stock.

BREAKING: Former president Donald Trump has posted on Truth Social that he has received a letter from Special Counsel Jack Smith informing him that he is the target of a federal investigation into January 6 and that he has 4 days to appear before the Grand Jury if he wishes.

— Tom Winter (@Tom_Winter) July 18, 2023

To wit, Trump just posted on Truth Social that he was notified on Sunday of a grand jury investigation spearheaded by the US Department of Justice into his purported efforts to overturn the results of the 2020 Presidential elections. Trump was notified by Special Counsel Jack Smith, who is also investigating the events surrounding the January 06 “insurrection” at the US Capitol.

Trump has four days to testify before the grand jury. Critically, the former President has conceded that such a move “almost always means an arrest and indictment.”

Source: https://www.nasdaq.com/market-activity/stocks/dwac

Unsurprisingly, Digital World shares have fallen in the red on the back of today’s news. For the benefit of those who might be unaware, the SPAC Digital World is slated to merge with Trump Media and Technology Group (TMTG), the entity that owns the Twitter-like Truth Social app.

As we had noted in a previous post, Digital World recently received a tentative all-clear signal from the SEC, paving the way for its much-delayed merger with TMTG to finally achieve closure. Under the preliminary terms, Digital World will pay a civil penalty of $18 million to the SEC immediately after closing its merger agreement with Trump Media and Technology Group. The SPAC is also required to amend its previously-filed Form S-4 to rectify any lacunae related to the accuracy of the presented information.

Of course, the SEC and FINRA have been investigating Digital World in connection with alleged violations of securities law and inappropriate disclosure of pertinent information in the run-up to the merger announcement. Specifically, the SPAC’s management is believed to have held private discussions about a merger with TMTG as early as May 2021 but failed to disclose this pertinent information in its public filings.

Additionally, Trump Media and Technology Group itself is being investigated by federal prosecutors in New York for allegedly violating statutes related to money laundering. The federal authorities are examining loans worth $8 million that were routed through the Caribbean but originated from obscure entities connected with Russian President Vladimir Putin.

Should it materialize, this will be Trump’s second major indictment. He already faces multiple charges related to the Stormy Daniels saga and the associated violations of campaign finance laws.