Trump SPAC postpones shareholder meeting as it seeks to delay merger deadline
Digital World Acquisition Corp. postponed its shareholder meeting by two minutes on Tuesday and said it would continue to count votes on whether to delay the merger with former President Donald Trump’s media company.
DWAC stock closed down about 11%. The special shareholder meeting has been adjourned until noon ET on Thursday.
The special-purpose acquisition company had a deadline of Thursday to take Trump’s media company and its Social Truth platform public. SPAC has previously warned that failure to extend the merger deadline could force DWAC into liquidation.
Adding to the conspiracy, Digital World also submitted a stock record On Tuesday, highlighted one of Trump’s recent “Truths” on his Truth Society platform, which further cast doubt on the SPAC deal.
The former US president announced his intention to create a new social media platform after he was banned by Facebook and Twitter last year.
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“In any case, I don’t need the finances, ‘I’m really rich!’,” Trump posted on Saturday. “Private company anyone???”
DWAC shares fell on Tuesday after Reuters reported earlier on Tuesday that it did not receive enough shareholder votes to extend the merger deadline with Trump Media and Technology Corporation. The merger would give Trump’s company a source of cash. Trump created Truth Social after he was banned on Twitter following the Capitol riots on January 6, 2021.
Trump Media denied reports of financial conflicts emerged in late August. Trump Media and Technology Corporation told CNBC in a statement that Truth Social is continuing to grow and is supported by the addition of recent ads to this platform.
“TMTG will continue to cooperate with all stakeholders involved in its merger plan and expect SEC officers to quickly conclude its review process without political interference.” , a company spokesman wrote to CNBC.
DWAC warns investors that Trump’s unsettled popularity could be a risk to the deal. The former president is also the subject of various investigations, including an investigation into the removal of sensitive documents from the White House. Both DWAC and Trump Media are also under federal investigation for possible securities violations.
DWAC needs 65% of shareholders to approve the extension. CEO Patrick Orlando said he controls a 20% stake through his ARC Investments but many of SPAC’s shareholders are retail investors.
Orlando took part in a media campaign and posted on Truth Social to garner enough votes for the extension. DWAC is still trading above its liquidation price, which will pay around $10 per share. There may be hope in the “built-in” extensions that Orlando has alluded to before. Such an extension would require donors to add more cash to the company trust.
