Elon Musk’s latest 180 deals another blow to Donald Trump’s fledging media company

Donald Trump is struggling to get his media company off the ground and take it public, but Tesla CEO Elon Musk keeps getting in the way with his attempt to buy Twitter (TWTR).
Shares in Digital World Acquisition Company (DWAC) -- the blank check company that is seeking a merger with Trump's Truth Social -- fell more than 4% on Tuesday on news that Musk was reversing course and planning to buy Twitter for $44 billion -Dollar after initially trying to back out of the deal in July.
Tuesday's drop is just the latest setback for Trump. Trump Media & Technology Group (TMTG), which operates Truth Social, has faced a number of roadblocks over the past few months. These include a Securities and Exchange Commission investigation into possible wrongdoing; reported financial problems within the company; and a freezing market for Special Purpose Acquisition Company (SPAC).
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And it all happened before Elon Musk filed a letter on Tuesday attempting to buy Twitter on the original terms he agreed to, reviving questions about whether Trump and other conservatives will stream back. The Tesla (TSLA) CEO has signaled his inclination to allow posting with little control, such as fact checking or consequences for expressing hateful views, when running the company.
Elon Musk takes a small bow as then-President Donald Trump congratulates him after launching a SpaceX Falcon 9 rocket from NASA's Kennedy Space Center in Cape Canaveral, Florida in 2020. (REUTERS/Jonathan Ernst)
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While Trump has repeatedly said he will not return to Twitter, many are questioning his word. In a note to investors this week, MKM Partners predicted he would return. The New York Times' Kevin Roose also reckons Trump will return to Twitter almost immediately "no matter how much fun he's having on Truth Social."
If Trump returns to tweeting, his presence could seriously undermine the Truth Social app, which the former president currently uses as his online megaphone. Trump's return could also spell trouble for other conservative social media sites that have sprung up since mainstream channels banned the former president on the grounds that he instigated the Jan. 6, 2021 attack on the Capitol.
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The prospects for DWAC, which plans to merge with Trump's Truth Social, are particularly bleak. DWAC's 52-week high hit $175, but the stock was trading at about $17 a share on Wednesday. Meanwhile, shares of Twitter surged on news of Musk's plans, finishing up 22% on Tuesday.
Digital World Acquisition Corp. (DWAC)
17.18 + 0.08 (0.47%)
As of 3:16 p.m. EDT. market open.
1D5D1M6MYTD1Y5YMax
DWACTWTR
“The voting continues”
This week's news also comes on the eve of a crucial deadline for Trump's SPAC efforts. In September, the company suffered a setback when it failed to get the votes needed to delay its proposed merger to 2023. The company received a four-week suspended sentence ending at a shareholders meeting scheduled for Oct. 10.
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SEC investigates whether Trump's company illegally negotiated with DWAC before the blank check company went public; DWAC says the SEC must resolve its investigation before the deal can close.
Recent reports from Fox Business and Axios have also documented financial troubles at Truth Social; Trump's company denies the reports, calling them "knowingly false bar talk."
Digital World CEO Patrick Orlando remains outwardly optimistic that Trump's company will eventually reach public markets, suggesting ballot efforts have made progress. "Voting continues - new voters every day!!" he wrote in a Truth Social post on Tuesday.
DWAC had previously said in a securities filing that a failure in that vote to seek a delay would mean it would likely be "forced into liquidation."
In 2020, Elon Musk overtook then-President Donald Trump during a briefing on a SpaceX mission at the Kennedy Space Center in Cape Canaveral, Fla. (REUTERS/Jonathan Ernst).
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Will Trump himself return to Twitter?
The overriding question, of course, is whether Trump will return to Twitter by invitation.
Musk signaled in May that he would ask him to come back, calling Trump's Twitter ban a "morally bad decision" that was "extremely stupid." Musk's ties to the GOP have also deepened throughout 2022, with the Tesla CEO even appearing at a Trump-hosted fundraiser in August.
A return to Twitter could hurt Trump's bottom line, but he could still be tempted to expand his reach. While Trump only has 4.14 million followers on Truth Social, he amassed 80 million on Twitter before he was banned and had a much more engaged audience.
So far, the former president has not responded to Musk's latest news. His Truth Social report instead focuses on allegations that he has mishandled classified documents since leaving office. Musk has also been vague in his plans for the site, only saying so far that he wants to build "the everything app" with Twitter.
Acquisition of Twitter accelerates development of X, the everything app
— Elon Musk (@elonmusk) October 4, 2022
Ben Vershkul is the Washington correspondent for Yahoo Finance.
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