Digital World Acquisition Corp (DWAC), the special purpose acquisition company (SPAC) that backs Donald Trump’s Trump Media & Technology Group (TMTG) may have to abandon its efforts after failing to garner enough shareholder support for an extension that would allow the deal to close.
The merger with DWAC would have brought TMTG US$293 million in cash. Furthermore, the SPAC had raised nearly US$1 billion in PIPE investments. TMTG planned to use its vast cash reserves to build a conservative media machine, including strategies to promote Trump’s recently launched Truth Social platform.
The passivity of DWAC shareholders has jeopardized all these grandiose plans. Shareholders who had to agree to extend the deadline for completing the SPAC-TMTG merger by one year have remained silent, and the percentage of shareholders who will approve the extension is likely to fall below the required 65 per cent.
DWAC executives are individually concerned about low turnout, owing to spectacular mismanagement and management’s failure to communicate the underlying intensity to DWAC shareholders.
Meanwhile, DWAC’s shares continue to suffer from a litany of negative social developments related to Truth Social and are at risk of bankruptcy.
Trump Media & Technology Group (TMTG), which operates the Truth Social could lose US$1.3 billion if the merger is not authorized eventually.
The sources for this piece include an article in Reuters.