The former US president announced his intention to create a new social media platform after he was banned from Facebook and Twitter last year.
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Digital World Acquisition Corporation. It postponed its shareholder meeting two minutes later on Tuesday and said it would continue counting votes on whether to delay a merger with former President Donald Trump’s media company.
DWAC shares are down 16%.
It was a special purpose acquisition company in September. Deadline 8 to announce the Trump Media Company and its Truth Social platform to the public. SPAC has previously warned that failure to extend the merger deadline could force the DWAC into liquidation.
Earlier today, DWAC shares slumped after Reuters reported that it failed to get enough shareholder votes to extend the deadline for its merger with Trump’s media and technology group. The merger would give Trump a cash injection. Trump created the Truth Social after he was banned from Twitter after January 11th. 6, 2021, Capitol riots.
Trump Media denied reports of the financial turmoil that surfaced at the end of August. The Trump Media & Technology Group told CNBC in a statement that Truth Social continues to grow and is bolstered by the recent addition of ads to the platform.
“TMTG will continue to cooperate with all stakeholders regarding the planned merger, and hopes that SEC staff will promptly conclude its review without political interference,” a company spokesperson wrote to CNBC.
DWAC warned investors that Trump’s volatile popularity could pose a risk to the deal. The former president is also currently under various investigations, including an investigation into the removal of sensitive documents from the White House. DWAC and Trump Media are also the subject of a federal investigation for potential securities violations.
The DWAC needed 65% of shareholders to approve the extension. CEO Patrick Orlando says he controls 20% of the stock through ARC Investments, but many of SPAC’s shareholders are retail investors.
Orlando has been on a media campaign and posting on the Truth Social to garner enough votes for the extension. DWAC is still trading above the liquidation price, which would pay about $10 per share. There may be hope for the “built-in” extensions Orlando alluded to earlier. This extension will require sponsors to add more funds to the company’s trust.
The result of the vote is expected to be announced Thursday.