Trump Media deal partner says shareholders approve delay of merger with Truth Social parent

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  • Digital World Acquisition Corp. seeks to take Donald Trump’s parent company Truth Social public.
  • DWAC, the so-called blanche company, held its shareholder meeting on Tuesday after numerous delays.
  • The company has secured the required 65% shareholder support to extend the deadline for the merger with Trump Media until September 2023.

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The blanchet company, which plans to list the Trump Media and Technology Group and its Truth Social platform, said Tuesday that shareholders voted to delay the deadline for its merger with the former president’s firm by several months.

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Stock Digital World Acquisition Corporation. closed more than 5% higher after a brief shareholder meeting announcing the delay. DWAC faces liquidation next month if it fails to secure a term extension, though the merger faces additional legal and financial hurdles. The SEC is investigating Trump’s Media-DWAC deal, as are federal criminal investigators.

The company, which has not generated any revenue and already has $1 billion in funding already at risk, has postponed the meeting several times in recent months in an attempt to garner shareholder support. DWAC required 65% of its shareholders to approve an extension of the merger with Trump Media through September 2023. In securities filing on MondayDWAC stated that there were “substantial doubts” about its ability to continue as an “going business”.

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Previously, DWAC failed to obtain the required number of votes from a large number of retail investors. The meeting was repeatedly postponed. DWAC CEO Patrick Orlando initiated the inline expansion with a $2.8 million investment from his company Arc Global Investments II.

“It’s a really difficult process when you have as many shareholders as we do,” Orlando said in an interview with Edge’s IPO on Tuesday just before the shareholders’ meeting.

Orlando has worked to garner votes on Trump Media’s Truth Social platform, and has even called on Trump Media CEO Devin Nunez and its chairman, former President Donald Trump, to help publicize the effort.

The voting stakes were especially high for some of the former president’s supporters, who shared on Truth Social and Reddit that they had poured thousands of dollars into DWAC to show support for the platform.

If a merger had taken place, it would have given Trump hundreds of millions of dollars in funds. It has already faced a number of legal and financial hurdles. The deal became the subject of a criminal investigation and its delay resulted in the loss of over $100 million in investments.

The former president has previously said he could take the company private. Internal documents revealed that Trump Media was also considering merging and partnering with other right-wing-friendly platforms, including Rumble and Parler.

Over the weekend, Elon Musk, the new owner of Twitter, reinstated Trump on the social networking platform. Trump was blocked by Twitter after the January 6, 2021 U.S. Capitol uprising, when hundreds of his supporters rioted and disrupted lawmakers who were officially counting Electoral College votes. The former president never tweeted after his reinstatement.

“I expected the truth [Social] be the main platform for the president’s tweets or his truth,” Orlando said during a fireside chat on Tuesday. “At Digital World, we don’t really control anything related to Truth and its users at the moment. But we’re watching it, and we really like what we’re seeing with user input.”

The special purpose acquisition company also faced the fallout from a whistleblower complaint filed by a Trump Media executive with federal regulators. William Wilkerson, senior vice president of Trump Media, filed a whistleblower complaint in August about securities infringement. Wilkerson identified himself as one of the founders of the company and said he no longer believed in its viability.

In September, the company said it lost $138.5 million of the $1 billion it received from private equity investors, also known as PIPE, to fund the merger. That same month, DWAC changed its mailing address to a UPS store in Miami.

In recent days, DWAC lost one of its board members when Justin Shaner, CEO of Shaner Properties in South Florida, resigned, according to a securities filing.

– Jack Stebbins of CNBC contributed to this article.

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