It is said that misfortunes never come alone. This appears to be the case for the Trump Media and Technology Group (TMTG), which faces growing hurdles in consummating its planned merger with the SPAC, Digital World (DWAC).
For those who might be unaware, the planned merger will furnish Trump Media and Technology Group with $293 million in cash proceeds that Digital World raised in its IPO. Additionally, hundreds of millions of dollars are expected to materialize in the form of PIPE investments. TMTG intends to use this cash influx to construct a conservative-leaning media machine in Trump's image, with these inflows benefitting not just Truth Social – a Twitter-like social media platform – but also providing the seed funding for a subscription-based, "non-woke" video-on-demand service as well as multiple cloud-based offerings under the envisioned "tech stack" suite of products.
However, this planned merger between Trump Media and Technology Group and Digital World has been complicated by a spate of ongoing investigations by the SEC and FINRA. Most of these investigations relate to alleged violations of securities law and inappropriate disclosure of pertinent information in the run-up to the merger announcement.
This brings us to the crux of the matter. The Guardian is now reporting that federal prosecutors in New York started investigating Trump Media and Technology Group last year for allegedly violating statutes related to money laundering. Specifically, the authorities are examining loans worth $8 million that were routed through the Caribbean but originated from obscure entities connected with Russian President Vladimir Putin.
This investigation further muddies the waters when it comes to the planned merger between TMTG and Digital World.
Bear in mind that Trump Media and Technology Group is already facing a cash crunch in the absence of funding from Digital World, which will only be unlocked upon a formal consummation of the merger agreement. We reported earlier today that Truth Social is now resorting to layoffs to conserve its scarce capital, especially as the platform remains unable to access cash from Digital World due to the non-consummation of the merger agreement between the two entities. Reportedly, at least six employees have been laid off recently, including the Chief Technology Officer, William "BJ" Lawson.
At the time of writing, Digital World shares are down nearly 5 percent in late-session trading.
The post Trump Media and Technology Group (TMTG) Is on the Hook for Receiving $8 Million From Putin-linked Entities, and Shares of Digital World Are Crashing by Rohail Saleem appeared first on Wccftech.