With everything that’s going on these days, folks may forget that Donald Trump was a grossly incompetent businessperson long before he was an indicted (alleged!) criminal. The news at the top of our now eternally profaned minds is all about the potential illegalities surrounding Trump’s hush money payment to an adult film star, but it’s important to remember that Trump is also really, really unintelligent. Notice that Stormy Daniels didn’t claim she spanked him with an issue of Harper’s or The Economist. She says it was a Forbes—possibly with his picture on it. And probably with a dog-eared Best of Marmaduke surreptitiously tucked inside.
But Trump’s literal criminal enterprise is still sputtering along, and now yet another of his stable genius ideas is starting to look pretty shaky. After Trump was kicked off Twitter in the wake of his bumbling coup attempt, he thought it would be a good idea to start his own social media company—and hire fugazi-cow-suing sycophant and former GOP House member Devin Nunes to run it.
He was also depending on a cash infusion from a special purpose acquisition corporation (SPAC) that’s currently under the microscope of federal investigators. And those investigations appear to be threatening the whole enterprise. Digital World Acquisition Corporation, the SPAC in question, still hasn’t received permission to merge with Trump’s media company, and until it does, the future of his upstart Twitter knockoff will remain uncertain.
The New York Times:
That deal has been waylaid by two intensifying federal investigations. One is focused on whether preliminary merger discussions between Digital World and Trump Media violated federal securities laws. The other investigation is looking at whether a group of early investors in Digital World — who were brought into the deal by [former Digital World Acquisition Corp. CEO Patrick] Orlando — engaged in improper trading.
So weird that a Trump-led business venture would come under investigation. That poor schlub has the worst luck ever.
Unfortunately for Trump and his media crown jewel Goof Social, there’s a deadline for completing the deal.
If the merger is not completed in the next six months, Digital World — established as a special purpose acquisition corporation — will have to return the $300 million it raised from investors in 2021 through an initial public offering. But it is not clear that the investigations by the Securities and Exchange Commission and federal prosecutors in Manhattan will be completed in time to permit the S.E.C. to approve the merger as required.
D’oh!
Well, I imagine $300 million is peanuts to a guy worth $10 billion, but apparently this is worrying enough to Trump Media insiders to evoke a few plaintive squeals.
Executives of Trump Media and
some shareholders of Digital World have accused the S.E.C. of trying to run out the clock. In February, officials with Trump Media
sent a letter to several Republican congressmen asking them to open an investigation into the S.E.C.’s refusal to approve the deal, accusing regulators of being biased against the former president.
Yes, yes, let’s just admit it. Most Americans are biased against the former president—in much the same way the former residents of Pripyat, Ukraine, are biased against reactor core meltdowns. But maybe if Republicans hadn’t spent the past 40 years trying to make the government small enough to drown in a bathtub, regulators would be able to complete their tasks more promptly.
Of course, the merger is being delayed not because Trump’s name is on it (not directly because of that, anyway), but because it appears to be fishy as hell. As The Times notes, SPACs are not permitted to engage in serious merger talks before going public, lest they violate federal securities laws. And so now “federal authorities are trying to determine if Digital World’s talks with Trump Media were substantive enough that they should have been disclosed before the SPAC sold shares to the public in September 2021.”
“If it was clearly prearranged, that was an egregious violation,” Michael Klausner, a professor of corporate law at Stanford Law School, told The Times. “The S.E.C. has the discretion to stop a merger where the disclosures violate security laws.”
Yeah, “egregious violation” really needs to be engraved on Trump’s tombstone somewhere. Or maybe that’s the only thing that should be printed on it: “Egregious Violation: June 14, 1946-???”
The details of the SEC’s investigations—which also involve potential insider trading—are fun if you want to dig in some more (though The New York Times has a paywall, unfortunately). But the gist appears to be that his company will be on thin ice if this deal doesn’t go through.
As The Times notes, “the clock is ticking on the merger” after Digital World shareholders gave the SPAC nine more months to finalize the deal, with Trump turning into a marginally more orange pumpkin on Sept. 8. Thus far, the company has been surviving on advertising revenue and a previous $37 million funding round.
If that funding runs out and the SPAC deal fizzles, well, Trump is intimately familiar with bankruptcy law, now isn’t he? He’ll figure something out. And, you know, he may soon have more than enough time to think about it.
Check out Aldous J. Pennyfarthing’s four-volume Trump-trashing compendium, including the finale, Goodbye, Asshat: 101 Farewell Letters to Donald Trump, at this link. Or, if you prefer a test drive, you can download the epilogue to Goodbye, Asshat for the low, low price of FREE.