The fate of the planned merger between former President Donald Trump’s media company and the shell company aiming to take it public – and give it an infusion of cash – has grown murkier as a crucial deadline approaches.
Digital World Acquisition Corp. has a Thursday deadline to merge with Trump Media and Technology Group, the owner of Truth Social. DWAC, a special purpose acquisition company, has spent the past week scrambling to drum up enough shareholder votes to extend the deadline for the deal. The companies have failed to complete the merger, and federal investigations surrounding the deal and Trump have piled up.
The result of the shareholder vote will be announced at noon ET Thursday.
DWAC had been scheduled to publicly announce the result in a special meeting on Tuesday, but CEO Patrick Orlando adjourned the meeting within two minutes to provide additional time for voting. Earlier in the day, Reuters reported that the vote had failed, citing sources familiar with the matter.
DWAC has previously warned that a failure to approve the extension could result in its liquidation, which would pay out around the stock’s original price of $10 per share. DWAC on Wednesday traded around $22; the stock was at around $97 in March.
Trump Media and Technology Group is facing obstacles as well. Its Truth Social app, which was created by the former president after he was banned from Twitter following the Jan. 6, 2021, insurrection, has been barred from the Google Play store.
The firm signaled that it’s still working on the deal.
“TMTG will continue cooperating with all stakeholders in connection with its planned merger, and hopes the SEC staff will expeditiously conclude its review free from political interference,” the company told CNBC Tuesday.
But Trump, in a Truth Social post on Saturday, indicated that the issue is being resolved and that he doesn’t need DWAC or the infusion of cash from the deal to keep the platform going.
“Google is coming along nicely (I think?). SEC trying to hurt company doing financing (SPAC),” the former president wrote to his 4 million Truth Social followers on Saturday. “Who knows? In any event, I don’t need financing, ‘I’m really rich!’ Private company anyone???”
The failure of the DWAC merger could burn retail investors who tried their hand in SPAC investing because of the president.
Orlando may be able to hold off DWAC’s liquidation, according to a Wednesday SEC filing. Orlando’s company and SPAC sponsor, ARC Global Investments II, plans to contribute $2.8 million of its own money to initiate a three-month extension.
DWAC, however, may not be out of the woods. The company is facing federal probes into possible securities violations by DWAC and Trump Media and Technology Group. Trump is also facing multiple investigations relating to the removal of sensitive documents from the White House and his role in the Jan. 6 Capitol riot.
DWAC has also warned in an SEC filing that Trump’s dwindling popularity could be a risk to the deal.
Representatives from DWAC and Trump Media did not immediately respond to requests for comment Wednesday.