The shareholder’s meeting of Digital World Acquisition Corp., the special purpose acquisition company (SPAC) formed to take former President Donald Trump’s media company public, was postponed until October 10 to allow for further voting on delaying the merger. The DWAC meeting had been postponed twice earlier in the day after being postponed Tuesday as well.
The deadline to complete the merger is this Thursday. A $1.3 billion inflow of capital from DWAC‘s public offering and a possible listing of Trump Media and Technology Group could be at stake in the decision. On Thursday, DWAC acknowledged that a company controlled by DWAC CEO Patrick Orlando, ARC Global Investments II, had deposited $2.8 million into DWAC’s trust account to activate a built-in, three-month extension.
The deposit of 10 cents per share effectively extends the merger deadline until December 8, roughly two months after the next special meeting is scheduled. DWAC concluded its statement by encouraging shareholders to vote in favor of the one-year extension. After the meeting was dismissed on Thursday, Orlando posted a photo of a tomahawk steak, a selfie with a white Ford Bronco, and quotations from Donald Trump and Thomas Jefferson to Truth Social.
In the extended trading session, DWAC shares fluctuated on little volume. Truth Social, owned by Trump Media, was established by the ex-president after he was banned from Twitter following the incident in the Capitol on January 6, 2021. If the vote doesn’t pass, as Digital World had warned it may, the SPAC will be dissolved.
Due to the built-in extension, the corporation has more time to collect votes, and if liquidation does occur, shareholders will receive around $0.10 extra per share, for a total of about $10.30. Tuesday was supposed to be the day that DWAC revealed the results of the vote, but a special meeting in Orlando was called off after only two minutes so that more people could cast ballots.
Reuters had earlier that day reported, citing sources with knowledge of the situation, that DWAC had failed to obtain the requisite votes for the extension. To approve the merger deadline extension, DWAC needs the approval of at least 65% of its shareholders. Orlando, through ARC Global Investments, owns 20% of the shares, but he claims that many regular people have bought into the venture.
$DWAC “executives don’t believe they will be able to muster enough shareholder support in time & have started to consider alternative options”
Per Reuters, DWAC is considering postponing the vote deadline or could extend 6 months w/o shareholder approval
— spactrack.io (@SPACtrack) September 6, 2022
With Orlando’s help, those investors can vote for Truth Social. The Securities and Exchange Commission (SEC) is looking into the agreement for possible securities violations after hearing that Trump Media and DWAC representatives met to negotiate the merger before DWAC went public. Trump Media and Technology Group has stated that the delay in the merger is due to the SEC’s lack of “relevant response,” which they claim has been promised for quite some time.
As stated in a statement released by Trump Media, “in the interests of simple justice, the SEC has to set aside any unlawful political motivations and bring its examination to a speedy conclusion.” On Thursday, CNBC contacted the SEC for a response. Trump Media has disputed claims that it is having financial difficulties and is in debt to a contractor to the tune of nearly $1 million.
The company’s former president has hinted that they might not require the DWAC deal’s capital infusion. “Anyway, I don’t need money, ‘I’m really affluent! Any interest in forming a private firm, anyone??? On Saturday, Trump published a post on Truth Social.
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