This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

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 voluntary payment. Meanwhile, Rudy Giuliani, another longtime Trump associate, has already accepted that Trump reimbursed Cohen for the hush money sent to Daniels. However, the former US President continues to maintain that the payment in question was not, in fact, a reimbursement but a monthly retainer. Cohen was jailed in 2018 on two counts, including violations of campaign finance law.

We just announced a 34-count felony indictment of former President Donald J. Trump. Learn more: https://t.co/PTTh2zlsvv pic.twitter.com/IUE6JjdrS2

— Alvin Bragg (@ManhattanDA) April 4, 2023

Yesterday, after the go-ahead from the grand jury in this case, Bragg charged Trump with 34 counts of falsifying records. While most of these charges relate to bookkeeping fraud, which is considered a mere misdemeanor, any elevation to the level of felony required prosecutors to show that Trump intended to commit, aid, or conceal a second crime. And this is where the charge of falsifying business records to deceive state tax authorities comes into play. In essence, this charge relates to how the payment made by Trump to Cohen was greater than what Cohen paid Daniels. Bragg alleges that Trump and Cohen mischaracterized this payment for tax purposes as consideration for "legal services performed in 2017" even though the payment was, in reality, a simple reimbursement. According to some tax specialists interviewed by the New York Times, this charge could prove tricky for Trump.

On Truth Social this morning, after his day in court, Donald Trump has instructions for congressional Republicans: defund the FBI & DOJ pic.twitter.com/QJRrDI0Ufn

— Garrett Haake (@GarrettHaake) April 5, 2023

Meanwhile, as Trump appears to be cornered by his growing legal troubles, he is lashing out front, right, and center. Yesterday, the former US President went so far as to call for defunding the Department of Justice and the FBI. Interestingly, Trump has been skeptical of the movement that calls for defunding the police.

So, I have read the Trump indictment and the accompanying Statement of Facts.

I tried to give it an objective look as a lawyer.

Here are a few of my predictions of what is likely to happen in this case...

— MetaLawMan (@MetaLawMan) April 5, 2023

As Trump's political horizon remains murky for now, Digital World shares continue to suffer. Do note that Truth Social, a Twitter-like social media app that serves as Trump's echo chamber of sorts, stands to benefit handsomely from the proposed merger between Digital World and Trump Media and Technology Group (TMTG). Should Trump get re-elected, Truth Social – the only social media platform on the former President's radar at the moment – will likely clock in a handsome boost to its profile. It is for this reason that Trump's political fortunes have become so critical for Digital World shareholders, who see his candidacy as the raison d’être and a life force of sorts for the struggling stock. At the time of writing, Digital World shares are down around 5 percent today.