Things already weren’t going especially well for Donald Trump’s media venture, and yesterday, matters took a turn for the worse. The New York Times reported:
The public listing of former President Donald J. Trump’s social media company took a fresh blow on Monday when the cash-rich shell company merging with Mr. Trump’s company disclosed in a regulatory filing that a federal grand jury in New York recently issued subpoenas to the company and its directors.
In case anyone needs a refresher, let’s revisit our earlier coverage and review how we arrived at this point.
It was last fall when the former president and his team launched the Trump Media & Technology Group, which appeared to have bold, multimedia ambitions: It said it intended to compete with both Twitter and Netflix. To that end, the operation even hired a high-profile CEO: Former House Intelligence Committee Chairman Devin Nunes, despite his lack of media experience, announced he’d resign from Congress to lead the nascent company.
It hasn’t exactly been smooth sailing. As regular readers know, the Twitter-like Truth Social app was plagued by technical difficulties and missed deadlines. Some top executives’ resignations made matters worse.
But the most dramatic problem relates to the venture’s financing.
Because the former president has a history of bankruptcies and loan defaults, he couldn’t simply go to a major American financial institution to help bankroll his media venture. So, Trump agreed to merge his operation with a special purpose acquisition company (SPAC), called Digital World Acquisition. As the Times has reported, “To get his deal done, Mr. Trump ventured into an unregulated and sometimes shadowy corner of Wall Street, working with an unlikely cast of characters.”
Indeed, as we discussed late last year, the Republican ended up working with a dubious Chinese operation, all of which apparently drew the interest of investigators at the SEC and the Financial Industry Regulatory Authority (FINRA), which typically investigates things like insider trading.
It was against this backdrop that the shell company that intends to merge with Trump’s company said its board of directors received subpoenas from a federal grand jury. And why does that matter? Because, as the Times’ latest report added, it suggests that in addition to the SEC and regulatory investigations, federal prosecutors in Manhattan have also “joined in the scrutiny of the merger between Digital World and Trump Media.” To be sure, as Rachel explained on the show last night, this isn’t the only criminal investigation surrounding the Republican, but it is one of the former president’s biggest headaches. As Axios recently reported, “Truth Social’s financial prospects are heavily reliant on investment tied to the merger.” The more the investigations delay the merger being finalized, the more it’s an open question as to whether Trump’s venture will ever get the capital it’s looking for.
Steve Benen is a producer for "The Rachel Maddow Show," the editor of MaddowBlog and an MS NOW political contributor. He's also the bestselling author of "Ministry of Truth: Democracy, Reality, and the Republicans' War on the Recent Past."
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