Trump-Tied Social Media SPAC Slides After Key Executives Quit

(Bloomberg) -- Shares of the shell company taking Donald Trump's media venture public extended their selloff after a report that a pair of key executives resigned and Elon Musk bought a sizable stake in social-media competitor Twitter Inc.

Digital World Acquisition Corp., the special-purpose acquisition company merging with Trump Media & Technology Group, fell 10% Monday to extend a losing streak for a seventh-straight day as downloads of the Truth Social app dry up. The decline was triggered by a Reuters report that Truth Social's chiefs of technology and product development Josh Adams and Billy Boozer have resigned and as Musk became Twitter's largest shareholder.

Shares of the SPAC have lost 21% since March 24. Monday's drop marks the latest disappointment for investors betting that the former president could create a media company rivaling the likes of Twitter and Facebook. More than four million shares were traded and warrants for the SPAC slipped 13% to $14.15.

Details surrounding Trump's media venture have been scarce, but the rollout of Truth Social has been plagued by snags as users were told they couldn't sign up and others received error messages. Despite being available for more than a month, hundreds of thousands of users who were able to download the app are still on a waiting list without access to its full functionality and the app is not yet available to Android users. Downloads of Truth Social have declined 95% to less than 8,000 per day from an initial boom of 170,000 when it launched in February, according to research firm Apptopia.

Representatives for Trump Media & Technology Group and Digital World didn't immediately respond to Bloomberg News emails requesting a comment.

Musk's stake in Twitter comes after he polled his followers on the social media website last month, asking whether the platform adheres to the principles of free speech. After more than 70% said no, the billionaire chief executive officer of Tesla Inc. asked whether a new platform was needed, adding that he was giving serious thought to starting his own.

The aim of Trump Media & Technology group is to rival “the liberal media consortium and fight back against the ‘Big Tech' companies of Silicon Valley,” according to an October statement.

Short sellers have seen more than $106 million in mark-to-market gains since shares popped after Truth Social's debut, according to data compiled by financial analytics firm S3 Partners.

Retail traders weren't as quick to snap up shares of Digital World, with it ranking just 18th among the most bought assets on Fidelity's platform. The buying lagged the demand for Twitter, which was the top buy in Monday's session and the biggest percentage gainer in the S&P 500, rising 27%.

On Thursday, Digital World hit yet another snag, saying it was unable to file its form 10-K annual report with the SEC within the prescribed time period.