On Monday, CNN Business reported that shares of former President Donald Trump's "blank check" company have surged in the wake of reports that tech billionaire Elon Musk is pulling out of his agreement to purchase Twitter and take it private.
"Shares of Digital World Acquisition Corp., the special purpose acquisition company that has agreed to merge with Trump Media & Technology Group, surged 15% in premarket trading Monday morning after Elon Musk said he would back out of his deal to buy Twitter (TWTR)," reported Jordan Valinsky. "The surge comes after Musk announced late Friday that he was pulling out of his agreement to buy Twitter, citing the lack of information about the percentage of Twitter accounts that are bots. Musk's lawyer said that placed Twitter 'in material breach of multiple provisions' of the original agreement."
This comes as Trump slammed Musk as a "bullsh*t artist" at a rally in Anchorage, Alaska.
Musk originally claimed he was purchasing Twitter for the purpose of reforming its policies to reduce censorship and promote "free speech," making him a darling of Trump supporters who have long claimed baselessly that the site suppresses conservative viewpoints — even though, as CEO of Tesla, Musk ironically has a reputation of illegally silencing workers who try to unionize or customers who report problems with their vehicles. In subsequent speeches to Twitter employees, Musk even seemed to endorse the very same policies that conservatives were complaining suppressed free speech in the first place.
Some business observers have speculated the real reason Musk wanted to buy Twitter might have been as a way of offloading Tesla shares he feared were overinflated — and that he's backing out not because of "bots" but because after Tesla's latest market losses, he can't actually afford it.
Regardless, Musk now faces a lawsuit from Twitter seeking to force him to honor the $44 billion agreement — and even if he prevails, he could be on the hook for a $1 billion termination fee.
Trump's "blank check" company — formally known as a special purpose acquisition company, or SPAC — was used to create a competitor to Twitter, known as Truth Social, which likewise bills itself as a friendly space for conservatives "censored" by Twitter. The website has been plagued with technical and leadership problems from the beginning, some investors say they were unaware Trump was even involved in the deal when they signed on, and the CEO of Digital World Acquisition Corp has been hit with a lawsuit alleging the entire deal was a fraud scheme.