Trump media company faces looming deadline to keep deal alive

New York

The controversial deal to go public with former President Donald Trump’s social media platform faces a crucial deadline this week to keep the deal alive.

Digital World Acquisition Corp., the blank check company seeking to merge with Truth Social owner Trump Media & Technology Group, had given shareholders until late Tuesday to vote on whether to extend the merger agreement in order to give more time to the agreement. end.

But on Tuesday, the company launched the box on the road. In a Securities and Exchange Commission filing, Digital World said it had adjourned its shareholder meeting to Thursday, Sept. 8 at 12 p.m. ET to “allow more time” for investor approval.

Trump Media and Digital World face a deadline Thursday to complete the deal, which has been stalled by investigations by federal authorities.

Reuters reported earlier that the blank check company did not receive enough votes to extend the merger deal. Representatives for Digital World did not immediately respond to requests for comment.

After the meeting adjourned, Digital World stock gained 3% after hours on Tuesday after losing 11% in the regular session.

If at least 65% of its shareholders do not approve the extension, the SPAC (special purpose acquisition company) could be forced to liquidate, returning the roughly $300 million it raised a year ago. . It would also threaten the $1 billion in additional investment that Trump Media has raised.

The backers of the deal could exercise an option to extend the deal on their own for three months. Such a move would require the sponsor to deposit up to $2.9 million in a trust account, according to filings.

The Trump SPAC has been mired in a series of legal and regulatory issues amid what experts have described as red flags. The legal review includes investigations by the Department of Justice and the SEC.

Digital World said those probes had blocked the possibility of completing the deal and warned that without an extension it would be “forced to liquidate”.

Trump posted a message on Truth Social over the weekend suggesting he is not concerned about the fate of the deal.

“The SEC is trying to harm the company that funds (SPAC),” Trump wrote. “I don’t need financing, ‘I’m really rich!’ Private company anyone???

On the other hand, Patrick Orlando, the CEO of Digital World, pleaded with the shareholders to grant the extension of the merger.

“Obviously this is an important vote for us,” Orlando said last week, according to an interview transcript posted online. “We had some delays. It’s a case with a lot of attention on it. It’s slower than expected, but we fight every day, we work every day to get the ball going.

Truth Social, the Twitter-like social network at the heart of the Trump media business, remains unavailable on Google’s Android app due to flaws in the app’s content moderation systems, a spokesperson said. Google at CNN last week.

Cathy W. Howerton