The special-purpose acquisition vehicle supporting the parent company of Donald Trump’s social media platform may need to exit after it hasn’t yet gotten enough shareholder support to expand, giving it more time to strike a deal.
Shares of Nasdaq-listed Digital World Acquisition Corp. fell 17%.
At a special shareholders’ meeting on Tuesday, CEO Patrick Orlando delayed until noon Thursday to vote on the SPAC extension, giving him more time to complete a deal to merge with Trump Media and Technology Group. If 65% of shareholders do not approve of the extra time Orlando requested, SPAC could be forced into liquidation, which would upset the financial plans of the Trump company.
SPACs are also called “blank check” companies that go public, raise money, and look for something to buy, hiring the target audience in the process without the need for a formal IPO. They have to compete for a transaction within a certain time frame.
But the TMTG deal announced last year stalled between a federal investigation and financial hardship. The Truth Social app was recently banned from the Google Play Store for violating content moderation policies. It is still available on the Apple App Store and online. Trump is engaged in a high-profile legal battle with the Justice Department over confidential government documents that he brought with him to Mar-a-Lago.
Orlando owns 20% of SPAC, but there are many other institutions and a large group of retail investors. He begged everyone to vote for overtime. “We have had delays. This is a deal that is getting a lot of attention. It’s slower than expected, but we struggle every day, we work every day to get the ball forward. – he said recently. “And this is where we need shareholders to step in and have their votes counted.”
TMTG bills itself as a technology and social media company, with Trump’s Truth Social as “a great tech alternative that seeks to create a haven for free speech free from point of view discrimination and oppressive censorship.”
Axios reported last week that Google had banned Truth Social from its app store due to concerns about posts containing threats of violence.
Trump’s “reaffirmed” messages included messages that Joe Biden and the Democrats wanted to destroy the country. One meme featured Vice President Kamala Harris, Biden, and House Speaker Nancy Pelosi with the words “Your enemy … is not … in … Russia” emblazoned on their eyes.
Media control group NewsGuard reported last month that Truth Social verified 47 accounts promoting QAnon, each of which had more than 10,000 followers. They identified 88 users, both verified and unverified, with more than 10,000 followers. More than a third were accounts that had previously been banned from Twitter. NewsGuard found that Trump has re-promoted QAnon accounts to his 3.8 million followers 65 times, but that was before the latest hijacking of him.
In response to the Google report, Trump’s company said, “TMTG does not wish to discuss its commercial issues in the public domain, but for the record, it responded promptly to all of Google’s inquiries. We believe all Americans should have. access to Truth Social, regardless of the devices they use. We hope Google approves Truth Social as soon as possible. “
The liquidation will result in the return of approximately $ 300 million raised by the SPAC.
Source: Deadline
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