Trading in the shares of the Trump-aligned Digital World Acquisition Corp. (DWAC) temporarily halted following a volatile swing Monday afternoon.
The value of DWAC's shares quickly shot up in value by more than 15 percent by 2 p.m., prompting a volatility trading halt on the stock that lasted roughly 10 minutes, according to the NASDAQ trading website, which publishes a list of trading halts. These pauses, known formally as LUPD halts, go into effect as a sort of circuit breaker when stocks' values rapidly swing.
DWAC is a special purpose acquisition company (SPAC) that merged with former President Donald Trump's social media company Trump Media & Technology Group (TMTG) in 2021 to bring the company public. But it has faced scrutiny by the Securities and Exchange Commission into trading that preceded the acquisition.
Stock in the company last week plummeted to its lowest point since it was founded in 2021 amid speculation that Trump could soon be indicted in the Manhattan District Attorney's Office probe of a $130,000 hush payment allegedly made to adult-film actor Stormy Daniels during Trump's 2016 presidential campaign.
After the stock's value dropped to the record-low $12.50 per share on Friday, it recovered slightly to $13.87 by Monday's close, a rise of nearly 11 percent.
The swing comes after Trump over the weekend said he believes authorities are planning to arrest him over the Manhattan investigation on Tuesday, urging his supporters to "protest." Trump has maintained his innocence in the case, which he calls a politically motivated "witch hunt."
Manhattan District Attorney Alvin Bragg, however, has not confirmed any plans to arrest or indict Trump, and the grand jury investigating the hush-money payment reportedly heard testimony from a last-minute source, attorney Robert Costello, on Monday.
Furthermore, a Trump spokesperson told Reuters that the former president was not notified of any arrest, and Trump has not provided evidence of the "illegal leaks" he said indicated the likely arrest.
Still, there have been indications of the probe wrapping up, including Bragg offering Trump the chance to testify before the grand jury, though the former president denied the opportunity.
According to Investopedia, trading halts are short stoppages across numerous exchanges. "Trading halts are typically applied ahead of a news announcement, to correct an order imbalance, or as a result of a large and abrupt change in the share price," Investopedia states.
DWAC wrote in an August 2020 federal filing that its business could be "adversely affected" by Trump's controversies.
"If President Trump becomes less popular or there are further controversies that damage his credibility or the desire of people to use a platform associated with him, and from which he will derive financial benefit, TMTG's results of operations, as well as the outcome of the proposed business combination, could be adversely affected."
Newsweek has reached out to DWAC via email for comment.
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