The special purpose acquisition vehicle backing the parent company of Donald Trump’s social media platform may need to pull out after it has yet to garner enough shareholder support for an extension that would give it more time to close the deal. deal.
Shares of Nasdaq-listed Digital World Acquisition Corp. are down 17%.
Reuters reported that at a special shareholder meeting on Tuesday, CEO Patrick Orlando pushed back the madoverbranduntil noon Thursday to vote on extending the SPAC deadline, something that will give another year to complete the deal to merge with Trump Media and Technology. Cluster. If 65% of shareholders do not approve of the one-year deferral requested by Orlando, the SPAC may be forced to liquidate, which would be a setback for the financial plans of the Trump company.
SPACs are also called “blank check” companies that go public, raise cash and look for something to buy, taking on the target audience in the process without the need for a formal IPO. They must complete a transaction within a certain time frame.
But the TMTG deal, announced last year, has been stalled by a federal investigation and amid reported financial difficulties. The Truth Social app was recently banned from the Google Play store for violating content moderation policies. It’s still available on the Apple App Store and online. Trump is in the midst of a high-profile legal battle with the Justice Department over classified government documents that moved with him to Mar-a-Lago.
Orlando owns 20% of SPAC stock, but there are a few other institutions as well as a large group of retail investors. He has been begging everyone to vote yes on the extension. “We have had some delays. This is a deal with a lot of attention on it. It’s slower than expected, but we’re fighting every day, working every day to get the ball forward,” he said recently. “And this is where we need shareholders to come in and count their votes.”
TMTG bills itself as a technology and social media company, with Trump’s Truth Social as “a Big Tech alternative that seeks to create a haven of free speech without viewpoint discrimination or oppressive censorship.”
Axios reported last week that Google has restricted Truth Social from its app store due to concerns about posts that include threats of violence.
The messages that Trump “reframed” included some claiming that Joe Biden and the Democrats are out 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” placed over their eyes.
Media watchdog group NewsGuard reported last month that Truth Social has verified 47 accounts promoting QAnon, all of which have more than 10,000 followers. They identified 88 users, verified and unverified, with more than 10,000 followers. More than a third were previously banned accounts on Twitter. NewsGuard found that Trump had reverted to trusting QAnon by promoting accounts 65 times to his 3.8 million followers, but that was before his latest wave.
In response to the news about Google, Trump’s firm said in a statement: “TMTG does not wish to litigate its business matters in the public sphere, but for the record, has responded promptly to all inquiries from Google. We believe that all Americans should have access to Truth Social no matter what devices they use. We hope that Google approves Truth Social as soon as possible:”
A liquidation would involve returning around $300 million that the SPAC raised.