Truth Social parent Trump Media’s merger with DWAC has been officially delayed

This illustrative photo shows the logo for Donald Trump’s new social media app, Truth Social, on a smartphone in Los Angeles, Feb. 21, 2022.

Chris Delmas | AFP | Getty Images

Digital World Acquisition Corp., the blank check company that plans to take Trump Media and Technology Group and its Truth Social platform public, said Tuesday that shareholders voted to approve an extension of the deadline to merge with the former president’s company.

Shares of the special purpose acquisitions firm rose more than 5% following a brief shareholder meeting announcing the delay.

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The company, which has $1 billion in funding already at risk, has delayed meeting several times in recent months as it works to gain shareholder support. DWAC needed 65% of its shareholders to approve a deadline extension to merge with Trump Media through September 2023.

DWAC previously failed to get the votes it needed from its large swath of retail investors. The meeting has been adjourned numerous times. DWAC CEO Patrick Orlando has initiated an integrated extension with a $2.8 million contribution from his firm Arc Global Investments II. DWAC faces liquidation next month if it fails to secure a merger extension. The Securities and Exchange Commission is investigating the Trump Media-DWAC deal.

“It’s a really tough process when you have as many shareholders as we did,” Orlando said during an interview with IPO Edge on Tuesday immediately before the shareholders’ meeting.

Orlando has been working to garner votes on Trump Media’s Truth Social platform and has even urged Trump Media CEO Devin Nunes and its chairman, former President Donald Trump, to help publicize the effort.

The stakes of the vote were especially high for some of the former president’s supporters, who shared on Truth Social and Reddit that they’d invested thousands of dollars in DWAC in a nod of support for the platform.

If a merger were to happen, it would give hundreds of millions of dollars in funding to Trump Media. He has already faced a number of legal and financial hurdles. The deal was subject to a criminal investigation, and its delay resulted in the loss of more than $100 million in investment.

The former president previously said he could privatize the company. Internal documents have shown that Trump Media has also been considering mergers and partnerships with other pro-right platforms, including Rumble and Parler.

Over the weekend, Elon Musk, the new owner of Twitter, reinstated Trump on the social media platform. Twitter banned Trump in the wake of the January 6, 2021 uprising at the United States Capitol, where hundreds of his supporters rioted and disrupted lawmakers who were formally counting Electoral College votes. The former president has not yet tweeted since his reinstatement.

“I would expect the truth [Social] be the primary platform for the president’s tweets, or his truths,” Orlando said during Tuesday’s chat. “At Digital World, we don’t actually control anything to do with Truth and its users at this point. But we’re looking at it and we really like what we see with user engagement.”

The special purpose acquisition vehicle also addressed the aftermath of a Trump Media executive’s whistleblower complaint to federal regulators. Trump Media senior vice president William Wilkerson had filed a whistleblower complaint for alleged securities violations in August. Wilkerson described himself as one of the founders of the company and said he no longer believed in its viability.

In September, the company said it lost $138.5 million of the $1 billion in funding 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, stepped down, according to a securities filing.

–Jack Stebbins of CNBC contributed to this article.

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