This illustration shows the logo of Donald Trump’s new social media app Truth Social on a smartphone in Los Angeles, February 21, 2022.
Chris Delmas | AFP | beautiful pictures
The white-check company that plans to take Trump Media and Technology Group and its Truth Social platform public on Tuesday said shareholders voted to postpone the deadline for a merger with the former president’s company for several months.
Shares of Digital World Acquisition Corp. rose more than 5% following a brief shareholder meeting announcing the delay. DWAC faces liquidation next month if the deadline is not extended, although the merger faces additional legal and financial obstacles. The Securities and Exchange Commission is probing the Trump Media-DWAC deal, as are federal criminal investigators.
The company hasn’t generated any revenue and has $1 billion of finances at risk postpone the meeting several times in recent months as it works to garner support from shareholders. DWAC needs 65% of shareholders to approve the extension of the merger with Trump Media to September 2023. In a second stock filingThe DWAC said there was “substantial doubt” about its ability to continue as “as a going concern”.
The DWAC previously failed to receive the necessary votes from a large number of retail investors. meeting is postponed many times. DWAC CEO Patrick Orlando initiated a built-in extension with a $2.8 million contribution from his firm Arc Global Investments II.
“It’s a really tough process when you have as many shareholders as we do,” Orlando said in an interview with IPO Edge on Tuesday just before the shareholder meeting.
Orlando worked to garner votes on Trump Media’s Truth Social platform, and even urged Trump Media CEO Devin Nunes and its president, former President Donald Trump, to help make the effort public. .
The stakes in the vote were particularly high for some of the former president’s supporters, who shared on Truth Social and Reddit that they had invested thousands of dollars in DWAC to back the platform.
If a merger takes place, it would bring in hundreds of millions of dollars in funding for Trump Media. It has faced a series of legal and financial obstacles. The deal was the subject of a criminal investigation and its delay resulted in a loss of more than $100 million in investments.
The former president has previously said he could take the company private. Internal documents have indicated that Trump Media has also considered merging and partnering with other right-wing-friendly platforms, including Rumble and Parler.
Over the weekend, Elon Musk, the new owner of Twitter, restore Trump on social media platforms. Twitter banned Trump after the January 6, 2021 uprising on the US Capitol, where hundreds of his supporters rioted and disrupted lawmakers who were officially counting Electoral College votes. The former president has yet to tweet since being reinstated.
“I look forward to the Truth [Social] Orlando said in a side chat on Tuesday. But we’re watching it, and we really like what we’re seeing with user engagement.”
Special-purpose acquisition media is also dealing with the aftermath of a Trump Media executive’s whistleblower complaint with federal regulators. William Wilkerson, senior vice president of Trump Media, has File a complaint alleged securities violations in August. Wilkerson has described himself as one of the company’s founders and says he no longer believes in its viability.
In September, the company said it lost $138.5 million of its $1 billion in funding from private investors in public equity, also known as PIPE, to fund the merger. import. That same month, DWAC has changed its mailing address to a UPS Store in Miami.
In recent days, DWAC lost one of its board members when Justin Shaner, CEO of Shaner Properties in South Florida, stepped down, according to securities filings.
–CNBC Jack Stebbins contributed to this article.
