As Trump Calls for Defunding the Department of Justice and FBI Amid Worsening Legal Travails, Digital World Shares Have Given Up Nascent Gains

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Digital World (NASDAQ:DWAC) shares almost recouped all of their year-to-date losses last week, buoyed by expectations that Trump's imminent indictment by the Manhattan district attorney, Alvin L. Bragg, would unleash a popular backlash, allowing the former US President the opportunity to revive his political fortunes and those of the Trump Media and Technology Group (TMTG), which is slated to merge with the SPAC Digital World. However, out of the indictment's "34 counts of Falsifying Business Records in the First Degree," at least one charge is surprisingly straightforward to prove, thereby jeopardizing the SPAC's bullish thesis, which continues to trade as a proxy for all things Trump-related.

Let's back up and go over the pertinent context behind these fast-paced developments. Alvin Bragg formed a grand jury in January 2023 following his investigation of Trump for allegedly paying $130,000 in hush money to the adult-film actress Stormy Daniels from his campaign funds, thus violating campaign finance laws. This payment was reportedly routed via Trump's personal attorney Michael Cohen and was intended to purchase Daniels' silence vis-à-vis a sexual altercation with Trump back in 2006 during a celebrity golf tournament. Bear in mind that Cohen publicly admitted his role in this saga back in 2018. For his part, Trump continues to deny any knowledge of the transaction, asserting that Cohen was never reimbursed for this payment that he made of his own volition. Meanwhile, Rudy Giuliani, another longtime Trump associate, has already accepted that Trump reimbursed Cohen for the hush money