Donald Trump (left) and a phone displaying his social media app, Truth Social.
Brandon Bell/Getty Images/Christoph Dernbach/picture alliance via Getty Images
Digital World Acquisition climbed 15% Monday after Elon Musk walked away from his Twitter bid.
Musk cited a lack of clarity over spam accounts as driving his decision to leave the deal.
But he is likely to face a court battle that could see him pay a $1 billion breakup fee.
The company behind Donald Trump’s social media platform Truth Social soared higher Monday on news that Elon Musk was walking away from his Twitter takeover.
Shares of Digital World Acquisition, the blank check company taking Truth Social public, climbed as much as 15% Monday to $24.52 per share. Still, shares are down 77% from a high of $175 last year and down 52% from the start of 2022.
Trump, who was kicked off of Twitter, has billed Truth Social as an alternative platform. Meanwhile, Musk has regularly attacked Twitter for stringent rules that he says fosters censorship as opposed to free speech.
His bid for Twitter and the prospect that Trump could be reinstated hit shares of DWAC earlier. But Musk said a lack of clarity over spam accounts on Twitter pushed him to abandon the deal. Twitter stock fell on the news.
He said in May that the Twitter deal was “on hold” until the company could prove bot accounts make up no more of 5% of active users on the platform.
But he still faces a troublesome road ahead that could see him pay shareholders the agreed upon $54.20 per share, or a $1 billion breakup fee.