Shares of companies linked to Donald Trump’s new social media venture got an early boost on Monday on the news that nearly $1 billion in investments had been raised.
But, those early gains quickly fizzled after the firm planning to take Trump’s company public disclosed that the SEC and the Financial Industry Regulatory Authority – or FINRA – have been sniffing around on a fact-finding mission.
Digital World Acquisition Corp., which is merging with Trump Media & Technology Group and plans to take it public, said that both financial regulatory commissions had sought documents relating to communications between the two companies, board meetings, trading procedures, and the identities of certain investors, among other items.
And FINRA specifically asked for a review of trading that preceded the announcement of the two companies’ merging.
Trump Media inked its deal with Digital World to go public in October.
Trump supporters and day traders snapped up the stock – valuing the company as of Friday at almost $4 billion.
But Some Wall Street investors are reluctant to associate with Trump.
After the Jan. 6 attack by his supporters on the U.S. Capitol, Trump was banned from top social media platforms amid concerns he would inspire further violence.
In the first public set of projections since the announcement of the merger, Digital World Acquisition said it expects one facet of Trump’s company - a social media app called TRUTH Social - to have 81 million total users by 2026.
Twitter, by comparison, has over 200 million daily active users, and Facebook is approaching 2 billion.