Former US President Donald Trump on Oct. 20 announced plans to launch his own social networking platform, dubbed “TRUTH Social,” which is expected to begin beta launch for “invited guests” next month.
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The fate of the proposed merger between former President Donald Trump’s media company and the shell company that aims to take it public — and give it a cash injection — has grown murkier as a crucial deadline approaches.
The Digital World Acquisition Corp. is due to merge with Trump Media and Technology Group, owner of Truth Social, on Thursday. DWAC, a special purpose acquisition company, has spent the past week collecting enough shareholder votes to extend the deadline for the transaction. The companies have not completed the merger, and federal investigations related to the deal and Trump have mounted.
The result of the shareholder vote will be announced Thursday at 12:00 p.m. ET.
DWAC was scheduled to publicly announce the result in a special meeting Tuesday, but CEO Patrick Orlando adjourned the meeting within two minutes to allow additional voting time. Earlier in the day, Reuters reported that the vote had failed, citing sources familiar with the matter.
DWAC has previously warned that failure to approve the extension could result in its liquidation, which would pay out roughly at its original share price of $10 per share. DWAC was trading around $22 on Wednesday; the stock was around $97 in March.
Trump Media and Technology Group is also facing obstacles. His Truth Social app, created by the former president after he was banned from Twitter following the January 6, 2021 uprising, has been banned from the Google Play Store.
The company signaled that they are still working on the deal.
“TMTG will continue to work with all stakeholders in connection with its proposed merger and hopes SEC officials will complete their review in a timely manner and free from political interference,” the company told CNBC on Tuesday.
But Trump indicated in a Truth Social post on Saturday that the issue will be resolved and that he doesn’t need DWAC or the cash injection from the deal to keep the platform going.
“Google is making good progress (I think?). SEC seeks to harm companies providing financing (SPAC),” the former president wrote to his 4 million Truth Social followers on Saturday. “Who knows? Anyway, I don’t need funding, ‘I’m really rich!’ Anyone private company???”
The failure of the DWAC merger could sear retail investors attempting SPAC investing because of the President.
Orlando may be able to delay DWAC’s liquidation, according to an SEC filing Wednesday. Orlando’s corporation and SPAC sponsor, ARC Global Investments II, plans to contribute $2.8 million of its own funds to initiate a three-month extension.
However, DWAC may not be out of the woods. The company faces federal investigations into possible securities violations by DWAC and Trump Media and Technology Group. Trump also faces multiple investigations related to the removal of sensitive documents from the White House and his role in the Jan. 6 Capitol riots.
DWAC has also warned in an SEC filing that Trump’s waning popularity could pose a risk to the deal.
Representatives from DWAC and Trump Media did not immediately respond to requests for comment Wednesday.
