Deal partner Trump Media says shareholders agree to delay merger with parent company Truth Social
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 | Getty Images
Digital World Acquisition Company. , the blank check company that plans to go public with Trump Media and Technology Group and its Truth Social platform, said on Tuesday that shareholders voted to approve an extension of the deadline for the merger with the former president’s company.
Shares of the SPCA jumped more than 5% after a brief shareholder meeting announced the delay.
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The company, which already has $1 billion in funding already at risk, has postponed meeting several times over recent months as it worked to drum up support from shareholders. DWAC needed 65% of its shareholders to agree to extend the deadline for the merger with Trump Media to September 2023.
DWAC previously failed to get the necessary votes from a large segment of retail investors. The meeting has been postponed several times. DWAC CEO Patrick Orlando has begun a consolidated expansion with a $2.8 million contribution from his firm, Arc Global Investments II. DWAC faces liquidation next month if it cannot obtain an extension to the merger. The Securities and Exchange Commission is investigating the Trump Media-DWAC deal.
“It’s a really tedious process when you have as many shareholders as we did,” Orlando said during an interview with IPO Edge on Tuesday right before the shareholder meeting.
Orlando has been drumming up votes on Trump Media’s Truth Social platform, urging Trump Media CEO Devin Nunes and its president, former President Donald Trump, to help publicize the effort.
The stakes of 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 in a nod of support for the platform.
If the merger goes through, it will give hundreds of millions of dollars to fund Trump Media. She has already faced a series of legal and financial hurdles. The deal has been the subject of a criminal investigation and its delay has resulted in the loss of more than $100 million in investments.
The former boss previously said he could take the company private. Internal documents showed Trump Media also considered mergers and partnerships with other right-friendly platforms, including Rumble and Parler.
Over the weekend, Elon Musk, the new owner of Twitter, brought Trump back to the social media platform. Twitter banned Trump in the aftermath of the January 6, 2021 insurrection at the US Capitol, where hundreds of his supporters rioted and disrupted Representatives who were officially counting Electoral College votes. The former president has yet to tweet on Twitter since his reinstatement.
“I expect the truth [Social] To be the main platform for the president’s tweets, or his facts,” Orlando said during a fireside conversation Tuesday. At Digital World, we don’t actually control anything about Truth and its users at this point. But we’re watching it, and we really like what we’re seeing in users’ interaction.”
The SPAV was also dealing with the fallout from a whistleblower complaint from a Trump Media executive to federal regulators. William Wilkerson, senior vice president at Trump Media, filed a whistleblower complaint alleging securities violations in August. Wilkerson described himself as one of the company’s founders and said he no longer believes in its viability.
In September, the company said it lost $138.5 million in $1 billion in financing from private public equity investors, also known as PIPE, to fund the merger. That same month, DWAC 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, resigned, according to a securities filing.
– CNBC’s Jack Stebbins contributed to this article.
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