Donald Trump’s social media company’s plans to merge with SPAC remain on hold as shareholder meeting adjourned

Donald Trump’s social media company’s plans to merge with a special purpose acquisition company (SPAC) remain on hold after Digital World Acquisition Corp adjourned its crucial shareholder meeting after two minutes on Tuesday, as it said that he will have to keep counting the votes on whether to delay the merger, CNBC reported,

The special meeting of shareholders has been adjourned until 12:00 p.m. ET on Thursday, September 9, 2022, according to CNBC’s report. SPAC is seeking shareholder support for a one-year extension to complete the transaction. Currently, it has a Thursday deadline to go public with Trump Media & Technology Group (TMTG) – which operates the former US president’s Truth Social app.

Digital World Acquisition previously warned that a failure to extend the merger deadline could force SPAC into liquidation.

READ: Donald Trump’s social media company’s plans to merge with SPAC dealt a blow – reports

Adding to the uncertainty, CNBC noted that Digital World Acquisition also submitted a securities filing on Tuesday highlighting one of Trump’s recent “truths” on his social media platform, which casts further doubt on the PSPC agreement.

The former US president, who announced plans to start a new social media platform after being banned from Facebook and Twitter last year, said on Saturday: “Anyway, I don’t need to funding, ‘I’m really rich! Private business anyone???

Shares of Digital World Acquisition plunged on Tuesday after Reuters reported that it failed to get enough shareholder votes to extend the deadline for its merger with TMTG.

The proposed transaction, signed last October, has been frozen amid civil and criminal investigations into the circumstances surrounding the deal. Reuters said Digital World had hoped the U.S. Securities and Exchange Commission (SEC), which is reviewing its disclosures about the deal, would now have given its blessing for the deal to go ahead.

Most Digital World shareholders are individual investors and getting them to vote through their brokers has been difficult, Digital World chief executive Patrick Orlando said last week, Reuters reported.

Digital World needs 65% of its shareholders to vote in favor of the proposal to extend its life by 12 months for the move to become effective. By Monday evening, far fewer Digital World shareholders than required had voted in favor, its sources told Reuters.

If Digital World fails in its attempt to get its shareholders to support the one-year extension, its management has the right to extend its term without shareholder approval for up to six months. It is unclear whether Digital World will pursue this option and whether that would give regulators enough time to come to a conclusion on whether to allow the deal to continue, Reuters said.

Digital World revealed that the SEC, the Financial Industry Regulatory Authority and federal prosecutors are investigating the deal with TMTG, although the exact scope of the investigations is unclear.

If the deal goes through, TMTG would receive $293 million that Digital World has on hand, plus $1 billion committed by a group of investors in the form of a private equity investment (PIPE). The PIPE is set to expire on September 20 unless the deal closes.

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Cathy W. Howerton