The special-purpose acquisition vehicle that backs the parent company of Donald Trump’s social media platform may have to call it quits after it has yet to garner enough shareholder support for an extension which would give the transaction more time.
Shares of Nasdaq-listed Digital World Acquisition Corp. are down 17%.
No More Deadline
At a special meeting of shareholders on Tuesday, CEO Patrick Orlando pushed back a deadline until noon Thursday for a vote on extending the term of SPAC, giving him more time to close the merger deal. with Trump Media and Technology Group. If 65% of shareholders don’t approve of Orlando’s requested extension, SPAC could be forced into liquidation, which would spell a setback for Trump’s company’s financial plans.
SPACs are also known as “blank check” companies that go public, raise money, and look for something to buy, taking on the target audience in the process without the need for a formal IPO. They must compete for a transaction within a given time.
But the TMTG deal, announced last year, has been slowed by a federal investigation and amid reported financial difficulties. The Social truth The 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 in the midst of a high-profile legal battle with the DOJ over classified government documents he moved with him to Mar-a-Lago.
Orlando owns 20% of the shares of SPAC, but there are a few other institutions as well as a wide range of retail investors. He pleaded with them all for a yes vote on overtime. “We had some delays. It is an agreement with a lot of attention. It’s slower than expected, but we fight every day, we work every day to get the ball going,” he said recently. “And that’s where we need shareholders to step in and have their votes counted.”
TMTG markets itself as a social media and technology company, with Trump’s Truth Social as “a Big Tech alternative that seeks to create a haven of free speech without discrimination of point of view or oppressive censorship.”
Axios reported last week that Google had restricted Truth Social from its app store over concerns about messages containing threats of violence.
Messages that Trump “re-checked” included those that claimed Joe Biden and the Democrats were out to destroy the country. A meme featured Vice President Kamala Harris, Biden and House Speaker Nancy Pelosi with the words “Your enemy…is not…in Russia” displayed over their eyes.
The NewsGuard media monitoring group reported last month that Truth Social verified 47 accounts that promote QAnon, and they all have over 10,000 followers. They identified 88 users, verified and unverified, with over 10,000 followers. More than a third were previously banned accounts on Twitter. NewsGuard found that Trump had re-Truthed QAnon promoting accounts 65 times to his 3.8 million followers – but that was before his latest binge.
In response to news about Google, Trump’s firm said in a statement, “TMTG has no desire to litigate its cases in the public sphere, but for the record, responded promptly to all of Google’s inquiries. We believe that all Americans should have access to Truth Social, regardless of the devices they use. We look forward to Google approving Truth Social as soon as possible. : “
A liquidation would involve returning approximately $300 million that SPAC raised.
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